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QUESTION

Yes, I think I am clear about it. So when we stalk a stock that is moving up from a down trend we do not take position. We wait for itto rise, retreat and then we buy if it takes a turn around higher than the previous pivot low. Am I following it so far?

Another question - when a trend is rising and it turns around for a very very minor correction will it still be called a pivot or how muchfall is required.

REPLY BY SAINT

Yes! absolutely. And yes to your 2nd question as well.

QUESTION

Normally we take the weekly charts if we want to trade for the medium term (3-6 months). But if I want to trade only for very shortterm, i.e. 1 week or max 10 days then can we take the daily charts? If we take daily charts then, how many days of data should weconsider? Is three months of data enough?

REPLY BY SAINT

Even for short term trading, a weekly chart is important. Let us say you intend to get in to a position as a swing trade, maybe 5 - 7days. First look at the weekly charts, it MUST be in an uptrend. Now that we have a weekly that is in an uptrend, we now intend tobuy. A weekly in a downtrend, we DO NOT buy however great looking the daily chart is, however great the news is, we DO NOT buy.

Have a look at the chart of IND SWIFT below. We have a weekly in a downtrend, making lower pivot highs and lows, DO NOT BUY.Buy only when the weekly gives you a clear cut change in trend, and then buy declines using the daily charts.

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Just another chart

Basically, in a nutshell, for starters, keep away from trades where the daily is setting up, and the weekly is still in a downtrend. Thedesire to predict and get in at lower prices will cost you dear. Get into another stock where we have a weekly in an uptrend, and thenbuy declines.

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QUESTION

Just want to recap something we have learnt so far. We see charts on the weekly we see an uptrend ... a higher pivot high and lowand we can enter other indicators also permitting or we may just follow the trend.

Now what happens if we see a chart which is in uptrend and in which the chart keeps going up. Is there any method to enter or wewait for a pull back. I was seeing the charts of Seamrin. 526807. On the weekly its on a uptrend but the entire week on the daily itwas on upper circuit. Now it may do that on the 2nd week too.

So we wont enter now. We will wait for a pull back preferably to 135 levels where it made a window and also started moving up from

a sideways trend.

Now another part would be if after moving up for another week it again moves sideways and then moves up. Would u buy or leavethis counter if no pull back.

REPLY BY SAINT

SEA MARINE - We got a breakout on the daily charts on the 21st of April. Textbook entry, wait for a pullback or buy over the

previous day's high. In this case, buy on the 24th of April over the previous day's high.

What I would have done: I would have bought over the previous day's high (half) and would have liked to add the other half in apullback. In this case the pullback never happened, and I suppose I would be sitting with half a position.

And as for the second question, if this pulls back on the daily charts, it's a buying opportunity. If it goes sideways, it is a buyingopportunity. Of course if it makes a mild pullback on the weekly, it's a buying opportunity.

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QUESTION

Is it necessary that any breakout above or below a trendline should be accompanied with good volumes.I am looking into charts of various companies but i am unable to find any charts which show an uptrend. But today, I found one"Sanghvi Movers". This stock has broken its uptrendline and is again trying to re-enter the uptrendline. Please see the chart. If thisstock rises above the trendline, should this be accompanied by heavy volumes. What if it doesnt? Should that be regarded as a falsebreakout. Is there any way by which i can tell whether a breakout is false or not.

REPLY BY SAINT

Yes, a breakout needs high volumes to sustain it, else as you correctly pointed out, it will end up as a false b/o. But a breakdown canhappen without good volumes as markets fall with their own weights.

SANGHVI MOVERS: Not really a good example to study on due to its very low volumes. But in general, yes, that trendline (up) oncecracked, that very trendline that was previously support now becomes resistance. And like all resistance we need the breakout overresistance accompanied by good vols.

QUESTION

One question, since we know that the stock is in an uptrend and we are in trade, can we add to this position? I had read somewherethat you should keep adding to your winning position. If yes, when do we add and in what proportion? My thought is that every higherpivot low is an opportunity to add, am I right?

REPLY BY SAINT

Right on, my friend but how much each time, ahh, we are stepping slowly and steadily into money management proper.