I read Price Action for a living. I have been doing this for years and it amazes even now how stocks do a predictable price action dance, a classic textbook move. Let me explain with a case study.
Here’s how I visualized Marico on March 11, 2021
How should one read Price Action using Science of stock price action concepts?
Example: Maricohttps://t.co/QRPEm7pL1G pic.twitter.com/cFBBSNUyn2
— Deepak Singh (@smarket) March 11, 2021
What was my argument back then on March 11, 2021?
Buy near 390 as the stock approaches 200 day moving average with a price target of 530-540.
Marico stock did exactly that. It touched 200 dma a week later on March 18, 2021, and see what it did thereafter.
Source: Chartalert.com
Just see for yourself, over the last 3 months, this trade is up 35% and just near the price target of 530-540. I will be more than happy to take the profit here 🙂
How Reading Price Action helps?
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