The Indian stock market is going through a turbulent phase for the past couple of weeks, normally characterized by increased volatility, which at times is directionless. Due to this excess volatility, it has become increasingly difficult to place any positional bets as the markets are not behaving as per expectation. Owing to this, a short-term positional trader or a swing trader is not left with too many strategies to operate with as the dominant mentality at this point is to enter trades that offer favorable risk reward ratio.
One of the best strategies to deploy at this point in time for short term positional trading is to go for stocks that are under consolidation phase and have somehow manages to resist the volatile action of the overall market. The stocks that tend to consolidate during such volatile times are the ones that have either bottomed out already or are facing a strong support. Trading such counters ensures that as soon as the volatility subsides and the market resumes a definite trend, such stocks are the first ones to explode as they have been packing up the momentum for a long time. In addition to this, the risk associated is minimum and the potential upside is quite big.
The “Smart Trader+”, technical analysis web-based software offered by TraderGuide houses all such strategies that sum up the entire aforementioned discussion. Following are the results of the “positional consolidation” strategy that has been executed on Nifty-F/O index on EOD time frame.
Considering the aforementioned chart of IDBI Bank, it can be observed that the stock prices have been showing a tightly packed range bound movement aka consolidated movement. Similar is the state of MRF and National Aluminum as they have also been showing restricted action when the market was trading haphazardly. Trading in these stocks will offer an edge to the trader and even if they are correct only 50% of the time, the end result will always be positive.
The highly comprehensive technical analysis software offered by TraderGuide encompasses all the features that will be helpful to a trader in grabbing such winning trades. To know more, one may visit and gain the most out of this amazing strategy.
- Anand Singh Gaur
- Sunil Kothari