Reading Price Action is all about identifying that turning point and how the stock stuns everyone with outperformance in a short period of time. I love studying successful trades to reinforce conviction in setups and also help you understand what to watch out for when the stock is testing your patience. These lessons can help you trade better in the future. If you made the AngelOne trade, then Congratulations :). If not, you can always learn how to trade when the tide turns

Price Action Story of Angel One

Now look at the chart

Angel One stock witnessed a Gap down on July 17 2023 due to the following news. The stock became a sell

But then in August, Angel One published its monthly update which reflected strong growth in clients and trading volumes. No wonder the stock made a large candle move (Point 2).

A Large Candle move makes the stock a buy. So, buying at 1750 made sense just below the resistance of 1800. But here’s what the stock did thereafter – NOTHING for a month 🙂 AngelOne stock formed a bullish base at 50 dma and it’s only on Sep 13, it took off. The stock is now up 34% from the 1750 base. 

Source: Chartalert.com

Learn Science of Stock Price Action

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. I only cover Indian stock market here.

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