SparklyRaccoon

[Long Read] Complete Technical Analysis of SBI - Big Buying Opportunity ?

Here is the link - https://share.gvine.app/d85jqVYD85t9hqCSA

I made that post on a whim. I added this here just to let you know that i have SKIN IN THE GAME. I know the ***t i am talking about and i am not going to be just blabbering.

This is going to be a long read.

India is at the cusp of doing something very special and there is an opportunity to make massive wealth in the next 2 decades. I feel every working professional should look up to equities and get educated if possible.

If you have no idea of technicals, read this with an open mind, it might give you a new perspective. Technical analysis has a lot more to it than whatever you see normally on YT.

Many fundamental guys say that technicals are mumbo jumbo and it doesn't work. I know someone with over 100 cr of trading account who has built his career using both. I also know someone(Not directly but through someone) with 3000 crore ++ total portfolio and he uses technicals as well. It does work in the market it's just that you should know how to use it.

SBI has a very interesting Long term Structure developing. Here is how i am looking to go long in this Counter. [WEEKLY TIME FRAME].

If you see on the chart there are 2 trough points (curve marked in blue). First curve low point was at 500, 2nd curve low point was at 550. This is a volatility contraction. Volatility decreases, leading to smaller price swings. During 2nd price swing (B) look at the dip in volume when price moves lower. Supply is getting absorbed. The seller was not able to push the price lower and the stock bounced back again. Contraction gets smaller and smaller, sellers are losing control.

(There is so much to explain about VCP but i will have to deviate from the topic. I cannot emphasize enough how much money i have made trading this VCP and combining it with other filters . Look into it.) cont.

REST OF THE ANALYSIS IS IN THE COMMENT SECTION.

10mo ago

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SparklyRaccoon

Stealth10mo

Now, look at how price is re-testing the breakout region of 610, all the short term players are being shaken out of the market. This is a PULLBACK. Pullback is when RISK : REWARD turns into your favour.

THINGS TO NOTICE DURING PULLBACK ?

There are 6 weeks of candles and not even 1 candle is a Beari candle. Look at nothing kind of 1st 3 candles, then the 3 candles with long tails. This tells me that Sellers are not able to drive prices lower with Conviction after breakout and short term, impatient players are getting kicked out of the counter. There is not even a volume spike when price is correcting. Combining it with a big tail candle (marked with arrow on the chart), there is an intrinsic demand.

HOW I WILL Structure THE TRADE ?

Now I want a wide range of bullish candles in the breakout region of 610 with a spike in Volume.

This is when buyers will regain their control. Also 30 Weekly moving average is right around 610. This is a CONFLUENCE of data points for me. Although i am almost certain it will happen so i have bought 10% of the intended quantity. I will use a Pyramid approach to build my position. Price can consolidate for a few more weeks before it breaks out. My stop loss is going to be 550.

SparklyRaccoon

Stealth10mo

HOW TO ALIGN TECHNICALS WITH FUNDAMENTALS ?

SBI has been delivering good results for quite some time now. I wont go into the details you can see on the screener. But now my technical analysis aligns with fundamentals. Also the stocks are trading at low P/E. I like to go after the stocks that are not making a lot of noise or are not in the news a lot. I go after stocks that can move NEXT in the market. Technicals help me in timing my trade, when i have to buy, how much i have to buy, what should be by SL (In this case 545).

Look at the weekly chart of kotak, HUL how they are stuck in range for years. I don't wanna get stuck, I don't want to lose the opportunity cost of my money. At times opportunities are unlimited in the market but MONEY IS FINITE. That's where technicals come in. You got to have odds on your money.

FINAL FILTER (You wont get to see it easily elsewhere )

RS chart(Not usual RSI), at the bottom look at that line, it is not trending higher. This means SBI is not going to be a rank out performer and it will have a lot of pullback. I need to prepare for it. A strong trending RS means you will have a smooth trending move, which SBI doesn't have as of now.

LONG TERM INVESTMENT IS COMPLETELY DIFFERENT. WHATEVER I HAVE EXPLAINED IS TRADING, THAT CAN BE CONVERTED INTO INVESTMENT AS THINGS PROGRESS.

Tip : Look at the chart of Metal index weekly. Look how beautiful VCP was and now look at what it is doing.

Recently from OCT- NOV in Large cap i have traded

TATA CONS, HDFC AMC , TATA M, L&TFH and they are up about 25%, 24%, 21%, 19%. There are few up in single digits as well.

From Small cap- mid cap-

INOX WIND, ANGEL ONE, RAILTE up around 100% , 60% , 50%. There are others as well.

If you wanna know how i structured these trades, how i hold onto it and how i plan to exit. I will make another post about it picking 1 stock :)

Thanks for reading.:)

SparklyRaccoon

Stealth10mo

If i am going to be here for long enough or until i build my next position, I will show yall how to catch such moves in real time. Anybody can show it in hindsight. I will surely show in real time. :)