Shall we discuss some academics, at week-end ?
Normally, prices have directional up-move and stop at certain point. Such Trend terminates with certain price behavior.
Now the question is HOW to decide whether Trend has terminated or weakened, only with looking at prices, having no software or other studies. Though difficult, and of course not infallible, let us view such movements.
Firstly, when prices rise, price has tendency to reach at peak and
CLOSE near HIGH, which may be considered as Swing High and such Close may be the Highest Close. Now, if next day, if OPEN is below Highest Close and High of that day does not cross Highest Close, and day closes below Open of the day, we may assume as termination of up-trend.
CLOSE near HIGH, which may be considered as Swing High and such Close may be the Highest Close. Now, if next day, if OPEN is below Highest Close and High of that day does not cross Highest Close, and day closes below Open of the day, we may assume as termination of up-trend.
Another scenario may be bit different, but indicates termination of up-trend. In such case, Open of next day should be above High of previous day, which may also be Swing High. During the day, prices may remain range-bound, but Close would be below the previous close, which may be the Highest Close.
These are 2 preliminary indications of Change in Direction/Trend.
However, one may not reach conclusion to End of Up-trend for sure, until some other conditions are fulfilled in later time.
However, one may not reach conclusion to End of Up-trend for sure, until some other conditions are fulfilled in later time.
I am sure, those reading this shall have many questions, which may be put on this Forum. look forward to your queries.
Jeetendra Mistry
Ahmedabad - 4th July 2015
