Tag Archives: Technical Analysis of Stock Trends- Edward

Weekly Technical View for 19 Aug onwards – Harish Thakkar

Technical Views from our Guest Author Mr. Harish Thakkar

Nifty Daily Chart

Nifty Daily Chart

Bank Nifty breakdown from consolidation caused Nifty 4-day rally to collapse on Friday 1st hour itself. 1st hour volumes & crack of 123 points can never be a I-D correction of uptrend but nothing else than collapse, explained FNO volume & Hourly price bar charts.
Yet, close above monthly higher swing low, a last bottom 5477, which has monthly swing high top 6229. On weekly & daily downtrend, falling peaks. 5754 is last daily peak above which positional longs will be safer. Till than positional longs, options buying or I-D trading as the opportunities is preferred. Between 5477 to 5754 trade both the direction, where falls are faster than rise.
There are 3 probabilities around 5477

(1) Bottom may lend support & consolidations below 5754.

(2)Breakout failures and opportunities to trade B 2 buy as last trade.

(3)Breakdown of the 5477.Test for the breakdown is break of 3% = 164 points from bottom = 5313(5477-164) & close in breakout area. This will lead to test previous monthly swing lows 4888,4770, 4531.
With making weekly & daily up/dn swings. Use 3 day away rule as stop loss to trade if occurred. Both these points 3% break & 3 day away rules to be referred in Edwards & Magee -Technical Analysis of Stock Trends.

” All things come to those who waits- Steve Nison”

” Stick to your Guns – Edwards & Magee”. 

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What is Pullback and Throwback?

If you are often confused with this terminology, than read it further, your confusion will get clear.

According to classical book – Technical Analysis of Stock Trends By Edward, Magee.

PULLBACK

PULLBACK

Pullback is refereed as return of prices to the boundary of the pattern after a breakout to the downside.  Which means after any breakdown from price pattern, prices again come up to retest the boundary line or neckline of pattern, as shown in below attached figure.

 

 

 

 

 

THROWBACK

THROWBACK

 

Throwback is referred as return of prices to the boundary line of the pattern after a breakout to the upside.  Which means after any upside breakout from price pattern, prices again come back to retest the support or neck line of pattern, as you can see in below attached figure.

 

 

 

Over and above, John Bollinger in his book Bollinger on Bollinger Bands mentioned and depicted exactly opposite to what we said above.  According to him, Pullback is referred to price movement against the primary trend that does not interrupt that trend.  And in all shown example he has mentioned accordingly.  We respect author and his work, but we like to go with native definition and application.