Amber Enterprises has been one of my top picks in CY2020. I am glad price action helped me spot this stock at 1050 which now trades at 2400. I recommended the stock again near 1700 and here’s the rationale.
Reading Price Action is all about reading current economic and market trends and then looking for confirmation on charts for initiating a trade. One of the obvious things back then: Covid will accelerate the Make in India initiative and then all you had to do – look for companies that will benefit from the trend. I discussed the Atmanirbhar theme 10 days before Modijee made that famous speech.
Amber was my first pick in that theme on May 03 2020. You can read the complete article here
Here’s what happened to that trade:
Source: Chartalert.com
Amber Enterprises turned out to be perfect trade and it not only rallied from 200 dma but also did a breakout to a new high above 1680. I recommended the stock again near 1700 on the back of this new strength and no wonder the stock has rallied another 40% to 2400+
I covered Amber Enterprises twice and this is how it has worked out so far:
This trade is another example of how price action can be used to read economic and market trends and make a big winning trade.
Fundamentals don’t drive stock prices.
How people perceive those fundamentals drive stock prices.
As a market participant/trader, keep an eye on how the market views the fundamentals than being obsessed with your own version of fundamentals. It means look at the price action and it tells you without bias what the market thinks about the stock. Once you read the price action, go and find the reason why the market has such a view on the stock, and be aligned with it.
This is the level one mind training every individual requires to be in sync with market thinking. This is the real fundamental of Investing. I call it Science of Stock Price Action
If price action fascinates you – then Science of Stock Price Action is a great place to start.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers