STOCK SELECTION (Pullback Trading Strategy)

good morning guys so the market is open it's closer to 10 30 in the morning and in this video i'll discuss a few things about structures but my main aim here is to pick out stocks for next week and i'll just explain the rationale behind it so if you look at you know what we discussed yesterday the problem area in the market were the financials so look at the financial sector again if you see clear structure of lower high and lower low is still in place on 60 minute timeframe chart and nifty bank other than this if you look at sectors like auto metal is down yes but it's been a rank outperformer take a look at pharma fmcg energy is up realty is doing relatively well in fries up and even it is more or less flat just down about i think 0.4 percent so it's actually the financials and nifty bank like we discussed yesterday that is the main problem segment in the market and that is why nifty is not able to uh sort of take out this particular pivot level as fifteen thousand two hundred sixty one so the reference levels that we discussed yesterday was fifteen two six one and fourteen five hundred thereabouts this week i did about three videos all were recorded live when the market was on just basic price action analysis so please check these videos i have linked it up here so when you come to nifty bank there is a clear structure of lower high and lower low but the thing is that if you just switch to something like a daily time frame chart when you're trying to select stocks in terms of uh you know favorable risk reward you always need to look at pullback sort of setups and that is what i always advocate that beginners should be trying to accumulate in this region when the pullback is happening i'll just change the color so that it's visible even on a mobile device yeah so i hope now it's visible again when nifty bank was pulling back here this was one more region here when nifty bank was pulling back and now again a similar pullback structure is getting formed so i have taught pullback trading in great detail but it's it's only in the members section but don't worry about it even in free videos i've discussed pullback trading many times in in swing trading series in day trading series so before i move forward i get a lot of queries about channel membership guys let me tell you very honestly if you just watch my free videos those are more than enough you just need to practice a bit more in channel membership i go into great detail in explaining a lot of things especially about pullback trading breakout trading those kind of structures but it's not at all compulsory so if you're a student if you're someone who is just starting out trading there is no need to join membership please watch my free videos you don't need anything else so let us come back to the point now so my whole premise of trading is that i like such structures where price is pulling back and then i sort of analyze each and every stock within the particular sector just to see where i can 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again just remove all these markings along with nifty bank if you see financial sector is again one sector where you're clearly seeing some sort of pullback developing in the market come to something like auto sector again from this higher here there is some sort of pullback developing and the same pattern is playing out can you see all these regions here these were actually pullback opportunities in the market in the direction of trend so what usually happens a beginner thinks that whenever the market is pulling back it will go on and break this low price will simply start falling it mainly happens because when this pullback is happening you're reading opinion of lot of people about trend ending and those sort of things see i don't have a problem with people having opinions the only thing is that if you take something like nifty the opinions would have been that a new bear market is starting a market crash is coming just just open up youtube and see this the moment nifty falls to 300 or 400 points in a day or in a week the only thumbnails you'll see on youtube is that market is going to crash nifty p is at 40 50 60. i mean there is no one in the market to be very honest who can tell you what is going to come it's all about adjusting to what is going on currently so in terms of sectors if you look at metal sector it is still sort of rising rapidly i would like to look at meta sector somewhere here so that will not qualify pharma sector if you see this has pulled back a lot but this structure is still fine the main reason being that we have a region of consolidation here so i look at pharma sector only when nifty breaks below this pivot level that we discussed yesterday because then nifty would be doing something like lower high and lower low and only then i look at something like a pharma sector which is actually a defensive sector and which usually performs well when high beta sectors like nifty bank nifty finance auto metal these don't do well if you look at fmcg again very similar structure so if you look at this area this is a pullback here and this pullback is precisely happening at i'll just put out horizontal ray at the previous breakout region can you see here so this region here was the previous breakout region that formed on the chart and that is where the pullback is happening so even fmcg is something that one can look into just based on a simple pullback structures those sort of stock analysis can be done when you come to something like energy it's heading ahead that's moving higher consistently there's no pullback here realty again a very similar structure infrastructure again very similar to the energy sector does not qualify ites id definitely qualifies in terms of looking at it because price is again pulling back there is some sort of a loss of momentum in id that is why i have not selected it for this week but all will depend upon the kind of structure that nifty forms so my main premise here is that if nifty keeps forming a structure of higher high and higher low i'll switch to early time frame chart so nifty is forming a structure of higher high and higher low currently so if this plays out my focus will be banks finance and auto but if nifty starts forming a structure of lower high and lower low consistently that is when i'll try and look for opportunities in pharma fmcg and id so for those of you who are channel members please note that tomorrow i'll be releasing a video on the current market structure in which i'll be explaining which sectors you have to focus upon i'll also be talking a lot about sector rotation and please be active in the community section that is where i explain about volume distribution charts about vvap analysis and performance of our market with respect to the global market and which sector in our markets are strong and updates about the pullback trading concept is also given in the community section and for those of you who are not channel members you can just join channel membership for one month and watch all 39 videos in price and volume analysis series so these videos are spread out across three main playlists the first is about price volume analysis the second playlist is about application of price and volume analysis and the third series is about pullback trading so i just hope you understand how i am structuring overall preference of sectors just based on what nifty is doing so since nifty is still in a structure of higher high and higher low my preference will be bank finance and auto sector so let me just go through the charts here of banking stocks auto stocks and financial stocks we'll just quickly review and then i'll as we review the charts i'll tell you which stocks i am preferring so first let us come to access bank this is stock i definitely like so the way i will structure a trade here is that i'll initial uh i'll initiate that as some quantities here at 760 and then i will have a proper scale in if price takes out 783 so i'll wait for a proper structure to form that is in terms of higher high and higher low currently price is forming higher low but there is still lower high structure so some positions i'll add here then let the price pull back again and if price then breaks out that is when i have go ahead and scale in the remaining position right so let us now come to bank of baroda again this stock is still trending higher but i just see a lot of meaningful pullback that has happened on the downside so i'll just uh wait for structure to improve here and my main reference zone here will be something like this region so let me see if price can come out of 1992 range with volumes that is when i look at it the third stock is icici bank icc bank is in a relatively okay structure very similar to access bank the only difference being that icc especially is in a clear lower high and lower low structure icsa bank if you see the way i'll structure the trade this will be my first pivot and this will be my second pivot now the reason i'm not giving out the percentage quantity that i'll buy here because for every trader it is different so for my account size i figured out that i'll enter 30 position here and remaining 70 position here so again this is completely uh dependent on your own risk profile account size and the overall structure at times i only end up 70 here and 30 here but this time around i need more confirmation from the market that is why i'll enter first small bit of quantities 30 and remaining seventy percent so position sizing also depends a lot on the underlying market structure you cannot have a fixed formula for it the next talk i'll see is kotak bank kodak bank i think has uh consolidated way too much there is no bit of momentum that is visible in this stock so i personally won't prefer such structures it is still in some sort of uptrending structure there is i think this horizontal flag pattern structure that is developing at some stage it may break out if bank nifty starts doing well but for the time being i won't select kodak bank as of now my preference is only access and icci let us come to something like hdfc bank hdfc bank yes it is seeing some sort of pullback very similar to kotak bank structure momentum is a bit low currently but definitely this qualifies i won't say that hdfc bank does not qualify and the way i will structure trades here is that i'll scale in at this level and remaining scale out i will do here so that is how i will approach hdfc bank industry bank if you see this is one of the strongest banking sector stocks as of now there's no pullback yet that you can see here because uh if you look at how the stock is trending a clear structure of higher low is in place so for indecent bank to qualify i will want some more pullback to happen in the stock something in this region that is when i will consider yeah so this is also the previous breakout region here so that is why i'll only consider it at this point the next stock i'll pull up is sbi this has been a strong stock but again the the problem here with sbi is that the way i look at it there is a gap region here so if nifty bank starts under performing more there is always a risk that sbi will go ahead and fill this gap so that is why just purely because of this reason i won't be selecting this stock though momentum is good stock is in a good structure gap does represent bullishness it is just that given how the current structure of the market is i will avoid it let us now come to idfc bank there's no pullback structure developing here there's just one way trend and even on monday i think we analyze this stock as one of the strongest stocks in banking sector again i will want a decisive pullback to play out something like this only then i will be looking into the stock bandhan bank i mean there is no point talking about this stock i just don't like such structures where a clear breakdown started even in the month of december au small finance bank along with uh i think this was idfc bank is one of the strongest banks look at what this bank is doing and look at what bank nifty is doing bank nifty is moving lower au bank is really strong but again in terms of looking for pullback structures i will not trade this because there's no risk reward here i want a pullback here that is when i will look into the stock rbl bank again for a long period of time this is consolidating and the one thing especially to beginners that i would like to tell you is that when rbl bank is forming such a structure and something like icsa bank is forming such a structure or access bank is forming such a structure always give preference to access icsi something like hdfc kotak these are blue chip banks it's always better to trade these because these are relatively safe and you know you can take positions confidently in these stocks the last banking stock is city union bank again there is no sort of pullback that is visible here in terms of overall structure also if you see there's a lot of prolonged consolidation happening so when it comes to banking sector what i would prefer is something like icici bank that is for next week i'm only looking for long opportunities although i can tell you few things about short selling also but because i discourage beginners from participating in the fno segment that is why i don't uh speak so much about short selling so in the banking sector if you see my preference will be access bank icici bank and hdfc bank these are the only three stocks that i will track so let us now come down to something like auto sector because this is again a sector that is pulling back and i would like to assess risk and reward here the first stock i'll pull up is tata motors we are seeing some good amount of pullback happening this was the previous breakout region i'll just mark out this entire region here so i would want stock to consolidate and then again break out so this structure is still developing for next week i don't think tata motors qualifies let us come to baal krishna industries i won't be looking at this stock because there was a clear breakdown here this was a stock that i traded back in february i took a loss here so i was trying to buy the breakout here but did not materialize such things happen but after this particular candle that is that formed on the chart i'll just zoom in can you see this candle these are always structures that one should avoid because these candles will always pose resistance when the stock again starts moving higher so bharat forge is another stock let us see what is this stock doing again too much of sideways consolidation has happened in bharat forge beginning of january so this there's no point in looking at these structures because this clear loss of momentum here let us come to something like ashok land good amount of pullback is happening here i would definitely look into the stock i'll mark out a clear range and in ashok land unlike uh what we saw in access and icsi i would actually fully scale in when this level is taken out that is this 11 is broken out i will scale in and in case when the stock is breaking out market is not doing that well so what i'll do i'll just take up about 25 30 positions here wait for one more pullback then i'll add another 40 50 positions here hoping for stock to again rise in case stock does not rise and this will be my stop-loss level i'll simply exit my position the next stock i'll select is uh tvs motors so yes this is actually a trade that is already active in my opinion so there was a nice pullback here momentum in the stock has been exceptionally strong so this was uh the breakout level here that played out i'll just mark out the arrow here this is the breakout that happened so again if if i'm someone who's trading such structures i'll only put my stop-loss reference level at this point that is at 580 and in between let the stock do whatever it wants in case the stop loss is going to get hit i'm completely fine because when i'm entering here i already know what is my risk here this is just a psychological shift that everyone has to make especially beginners losses are a part of trading and whenever you enter a position just stop tracking the stock on you know every candle that it forms don't judge it just wait patiently you have your stop loss here you know how much money you are going to lose if the stop loss is hit so just be at peace and let stock do at least uh you know whatever it wants in the short term the next talk i'll pick up is iso motors too much of pullback has happened here loss of momentum so i won't be looking at this stock and especially the loss of momentum has begun with a gap down here so this is certainly something i won't be looking into then i'll pick up something like madison sumi uh this is a good stock the only thing is that there's no decisive pullback yet so this was the previous consolidation region so if i see something like a pullback happening here that is when i'll start looking at it so very similar to tata motors this is still a developing structure let us now come to something like mrf in mrf if you see um i mean the structure is okay uh there was some strong momentum here stock is pulling back but still i can't see a decisive level where i can go and you know scale in my uh positions so if i even choose something like this this is still not a relevant pivot so i'll again you know this is a developing structure and let's see if i can make a video on monday or tuesday and review these structures again so let us take a look at eminem now this is a fine stock a good structures some sort of minor pullback is in play so in m m i'll again prefer something like this range here like the stock breakout and based on what the market is doing if the overall momentum is improving i'll either enter everything at once or i'll enter 25 30 percent positions initially wait for a pullback and they'll build my positions next talk is a hero motor cop this stock is also looking good a strong momentum in play we have had some sharp pull back again a bounce back so in this talk the way i will structure the trade is i'll just mark out this region this i think this structure will still develop further i'll be a bit surprised if you get a breakout on an immediate basis i think stock will consolidate so this is a range i will keep in mind the next stock i'll select is uh bajaj auto so bajaj auto i don't see a structure yet developing because stock is still falling it is consolidating i'll just just mark out this here for future reference i'll come back to this either on monday or tuesday the next talk i'll select is maruti now maruti has seen a lot of pullback i mean after it broke out here price is easily pulled back to the breakout region so this represents loss of momentum for me i won't be looking into the stock let us take up something like apollo tires now apollo tires is in a good structure the thing with apollo tires is that you know if you pull out the chart here it has given a breakout now it is pulling back the only difference being that in terms of a pullback structure this still does not qualify because i would want the stock to at least move to something here and test out the previous breakout region that is when the pullback will get completed and see i'll just explain one thing can you see what is going on in apollo tires so if you look here this was actually a fresh breakout that happened yesterday and now the stock is pulling back sharply see the thing is at times when the trend cycle is mature you need to understand that you need to only capitalize on pullback opportunities because most of the breakouts that you see when trend is mature that is when breakout opportunities will not materialize and these will fail that is why i always ask beginners to prefers pullback trading initially because their risk reward is in your favor next talk is amara raja battery by now i think just in one glance you know i'm going to reject this stock because just too much of pullback has happened here i'll certainly not select this stock as a proper structure let us come to something like bosch again if you look at bosch it's still in a decisive lower high lower low structure this is the range for now that we can work with i'll even extend it to something here but in general i don't see you know some sort of strong structure developing by the way just take a look at nifty bank as we are talking about stocks again nifty bank is attempting to move lower and this is the problem in the market nifty bank financials look at financials again and today we are also seeing a breakdown happening in something like metals so metal if it continues this way in few days it will give a pullback opportunity that's for a future video but just look at nifty bank it's down about what 500 points and uh let's see if this opening low is taken out i think further selling will come i'll explain one thing since i'm on the topic when you see such gap down happening and such candles forming always take a note of the low that has formed if the candle breaches the low and you see pick up in volumes that is when continuation happens so this is just something if some of you are day traders short term traders you can take note of this concept so the next talk we will pull out is uh escorts again in escorts if you see there is no trend per se i mean it has been consolidating since what november so i don't want to look into such structures because uh you know there's no risk reward here i want stocks to be in good trend then some pullback and then resumption of trend last auto stock we'll pick up is exide industries this is a fairly fine structure but i think this is still developing so i'll just mark it out here this is the range i'll track there is no decisive movement yet either above or below this range i'll still track this so when we come to auto sector based on very simple things we selected ashok layland i also looked at something like tvs motors as a good structure and i think apart from this m m i think m m was the stock let me just confirm yeah i think m m was the stock so in auto sector these are the only three stocks we selected and i think in banking sector i don't know in which chart i've made the marking that is text marking let me just go back and check in banking sector it was only access bank icsa bank and hdfc bank i hope it is clear till now so that was i think in some chart i forgot on which chart i'll mark that particular text structure anyway let us now come to the third sector that is nifty financials in nifty financials these are the stocks i'll just mark it out here so the first stock is uh chola mundum it's a it's a beautiful stock but the only thing is that pullback is not yet sufficient so you always have to analyze which stocks will qualify let us do this exercise on friday and see for monday next week which stocks will qualify for a pullback structure this exercise can be repeated for short selling this will be exactly the opposite the only thing is that i don't teach short selling to beginners that is why i don't cover it here but so chola mundum is a stock that is strong but i won't be selecting it just because it is uh not yet you know pull back a lot hdfc life is definitely a structure that is good i mean we've had a good pullback here i'll just put it up here we've had a good pullback here this was a range that developed we had a breakout very similar to tvs motors even this trade i think is active currently so again my simple psychological rule will be that if i have taken entry at 7 30 my stop loss would be at 670. i just

don't care what the stock does then that is the only way you can ride a trend if you keep judging the candle at every 5 minute 30 minute 60 minute interval that is when you'll never do well in trading the one reason that beginners uh struggle so much in trading is because of the fascination of five minute time frame one minute time frame i get queries about three minute time frame i mean no no you shouldn't be doing that when it comes to hdfc stock is a relatively in a fine structure the only thing is that the range portion that i'll draw out is a bit wide this particular range here see when stocks like hdfc hdfc bank start giving such volatile movements you should always be careful and mark out a much wider range let price prove that it has underlying strength let it break out that is the only point that you should be heading forward and initiating a trade so in finance sector up till now i've only selected hdfc life pyramid won't qualify because there is no pullback here stock is just heading higher the next stock is ici prudential i personally won't prefer this stock because there's just too much of sideways consolidation that has happened here that is what i feel it's not in a bad structure as i'm reviewing it but uh still i mean if you wanna if you like the chart by just looking at it mark this range out that is what i would do but in in general i won't prefer this talk if it breaks out let me see i'll uh i'll try and review it the next talk i'll pick up is bajaj finance so there's some good amount of pullback happening here a clear range is visible so at times you'll also get these structures where range are clearly visible and it's much easier to trade these kind of structures so this is something i'll definitely select up till now in financial sector we have selected uh hdfc live and i think bajaj finance next talk will review is bajaj finserv again look nice uptrending structure and pullback has happened price has had some sort of recovery also giving you a sign that there is some sort of demand also visible i'll mark out this range here let us see if next week we get an opportunity by a clear breakout happening here the next talk i'll review is sbi life now an sbi life again very similar structure to hdfc live so certainly there is uh some sort of sector movement happening so this is the range i'll mark out so up till now in finance we have selected hdfc live bajaj finance and sbi live let us now take a look at icsa general insurance so stock is uh i would not select this stock the main reason being we had a vertical move up then we had a vertical move down so this usually happens when there is substantial loss of momentum and these structures you know i i just don't like trading these structures that is why i will completely avoid this the next stock is hdfc amc so this is a trade that is already active can you see the range here a clear range that is developing and uh stock has broken out of course the financial sector and every banking sector these sectors are not doing well so you can see some retracement happening but these are the sort of structures i really like to trade now the last stock we'll review is lic so in lic if you see i mean there's no substantial pullback yet this was a previous breakout region and given how financial sector is performing i'll just mark out this range here and i'll wait for further pullback to happen then i will review this structure so when it comes to what we have discussed here in terms of financial stocks i'll just mark out all stocks first so access then icici then i think we selected hdfc bank then we came to auto sector and in auto sector my watch list i think was ashok leyland then tvs i think then it was uh eminem right and now in financial sector it is uh hdfc life it is bajaj finance and i think one more was hdfc amc so i just hope you can see what i've done i have gone through i think what these are about 50 stocks or 30 40 stocks whatever the number will be and i've just selected one two three four five six seven eight stocks for the next week now that is what you need to aim for first go down to the sectors that you are tracking in terms of you know pull back in the direction of trend and then look for these opportunities see if you come to let me come down to nifty bank again so as we've been recording this nifty bank has further moved lower by about 100 points see what usually happens is that one psychological mistake that a lot of beginners commit is that when the price is moving higher everybody is thinking that they will only enter when the price will pull back this is a common psychological mistake but when the final pullback comes about you will start searching all these new stories here as to why the market is moving lower and to be very fair to people who report on financial markets they do a very good job but at times they react too much to even the minor pullbacks that happen in the market that is one reason why so many people have missed out on the entire nifty bank move the entire market move that has happened because every time this happens and take now for an example the headlines are volatility index it is the bond yields it is the federal reserve i mean there are so many things that are going on and that is something you just don't require as a trader so try and understand this point that either you can be a pullback trader or breakout trader once you have two three years of experience it is only then that you can you know be both simultaneously because psychologically both are very different and you need to compartmentalize in your mind which kind of trader you are at any given point of time just keep in mind uh whatever you discussed this week in terms of structure of nifty nifty bank that was forming in nifty if you see i mean this particular reference level this is the trend reference level i have in play currently that is why i'm only looking for long opportunities it is completely fine to be wrong because you always have risk management in hand to protect yourself and with the kind of structures that i have discussed here i think only couple of trades are only active and most of the trades are yet to confirm so if the market keeps moving lower you won't get any confirmation that is the beauty of waiting for a proper structure to form and then initiating a trade in the short term yes a nifty bank definitely remains a concern in the market if it stabilizes starts moving higher i think then overall market health will again improve so until the next video i think on tuesday keep tracking nifty bank nifty finance these are critical and go through all the live modules i've done this week because that is where day by day i've just explained how the structure was developing whether it was nifty bank or it was nifty so all the link to the live modules are given here please click on it and thanks a lot for watching this video guys kindly consider hitting the like button if you find the content useful have a great weekend ahead take care and be safe

2021-03-07 15:31

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