15-19 April 2024 | Bazaar This Week

Bazaar Updates for 15-19 April 2024 and more...

Hey there 👋🏼

Nifty 50 continued to correct after hitting its new all-time high to end the week at 22,147. After opening consecutively lower each day of the week, it showed some courage with a 0.7% up move today. Breaching its 50 DMA, however, most sectors ended in the red.

Let’s zoom in on what happened in the markets this week…

📈 Bazaar This Week (15-19 April 2024)

🚀 Stocks In Focus

> Caplin Point Labs gains as arm gets USFDA nod for eye infection treatment drug
> Mahindra Lifespace has received bookings for over 150 homes within just 2 days, valuing at Rs 350 crore
> The Department of Public Enterprises has granted the Navratna Status to HUDCO
> Tata Consumer has acquired 8.3 crore shares representing a 99.99% stake in Organic India from Fabindia
> Inox Wind has secured a repeat order for 210 MW for its 3 MW WTGs from Hero Future Energies
> Indus Towers continues its bullish streak as it benefits from Vodafone Idea’s fundraising worth ₹45,000 crores for its network expansion.

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🔮 Magical Moving Average Strategy

You must have heard about the ‘magic numbers’ of trading, the Fibonacci series. In case you haven’t, here’s a quick recap ⬇️

The Fibonacci sequence is a series of numbers where each number is the sum of the previous two numbers in the series. Also, the quotient between each successive pair is found to be 1.618, which means a ~61% increase with each number. Look at how they add up!

0,1,1,2,3,5,8,13,21,34,55….

This sequence, found in patterns of flowers, galaxies, and the human body, has also been used in trading. We will use a 61-period exponential moving average (EMA) inspired by the Fibonacci golden ratio.

Let’s strengthen our strategy by adding another momentum-following indicator, the relative strength index.

61 EMA + RSI Strategy

Before we find a good entry point for a stock as per the strategy, add the following indicators on TradingView:
- RSI with bands of 70 and 30
- 61-period exponential moving average (EMA)

Here’s how we will enter & exit a trade using this strategy:

LONG TRADE

1) Look for stocks whose RSI has crossed above 30 and with an average daily volume of at least 1,00,000 shares. The following scanner will help:

2) An entry is triggered when the RSI crosses above 30. Seeing a recognizable bullish candlestick pattern is a good confirmation.

3) The 61-period EMA will act as the first target price for the trade. Once the first target is hit, exit half your position.

4) After the price has crossed above the 61-period EMA, the EMA itself will act as a stop loss and exit for the trade henceforth. A bearish candlestick pattern formed on or below the 61-period EMA is a clear sign to exit the trade fully.

5) If the RSI crosses below 30 at any point, you should exit the trade.

SHORT TRADE

1) Look for stocks whose RSI has crossed below 70 and with an average daily volume of at least 1,00,000 shares. The following scanner will help:

2) An entry is triggered when the RSI crosses below 70. Seeing a recognizable bearish candlestick pattern is a good confirmation.

3) The 61-period EMA will act as the first target price for the trade. Once the first target is hit, exit half your position.

4) After the price has crossed above the 61-period EMA, the EMA itself will act as a stop loss and exit for the trade henceforth. A bullish candlestick pattern formed on or above the 61-period EMA is a clear sign to exit the trade fully.

5) If the RSI crosses above 70 at any point, you should exit the trade.

➡️ Since short selling is disallowed in India except for intraday trades, the short version of this strategy can be deployed only in the 15-minute and 1-hour time frames.

Example: Long trade in COFORGE (1H time frame)

This setup worked well for a long trade in COFORGE in the 1H time frame. The entry was triggered by a clear bullish candlestick forming when its RSI crossed above 30. This setup gave a ~3% profit up to the first target and yielded ~8% up to the second target.

Like the 61-period EMA, the Fibonacci series numbers can be used effectively to optimize your trading style and garner more profits. Our favorite instructor, Jyoti Budhia, has covered it all in her Fibonacci Trading Strategy course, which is currently available at a 50% discount!

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⭐️ X Ka Gyaan

Yesterday was totally crazy!

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📈 How Indus Towers is benefitting from the 45K crores Vodafone Idea fundraise

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