Price Behaviour November

Price
behaviour
“ Price is nothing but an outcomes of buyer’s

and seller’s behaviour
What is Price Action ?
 Price action is nothing but understanding , how the price is

behaving at a certain important level
 Price action is simple looking at the past data , in order to predict
the future
 It refer’s to understanding who’s is stronger , the buyer or seller ?
 Who’s is getting trapped ?
 And just common sense
NOTE – “ Price action on it’s own is very vague , you need handy
tools to execute “
SUPPLY AND DEMAND ZONES
 SUPPLY ZONE
 AN AREA FROM WHERE EXTREME SELL OFF TAKES PLACE IS
CALLED A SUPPLY ZONE.
DEMAND ZONE.
 AN AREA FROM WHERE EXTREME BUYING TAKES PLACE IS
CALLED DEMAND ZONE.
 NOTE: THEY ARE SIMILAR TO SUPPORT AND RESISTANCE

LINES BUT INSTEAD OF A SINGLE LINE IT IS MORE OF A ZONE.
SUPPLY ZONE
 AN AREA FROM WHERE EXTREME SELL OFF TAKE PLACE.

 WE EXPECT WHEN PRICE AGAIN REACHES NEAR SUPPLY
ZONE WE MAY SEE A SELL OFF AGAIN.
 PSYCHOLOGY:
 SELLERS WHO MISSED THE PREVIOUS FALL
 WAITS FOR THE PRICE TO COME TO THE SAME
 LEVEL AGAIN TO START SELLING OFF.
DEMAND ZONE
 AN AREA FROM WHERE EXTREME BUYING TOOK PLACE.

 WE EXPECT WHEN PRICE REACHES NEAR DEMAND ZONE
WE MAY SEE BUYING AGAIN.
 PSYCHOLOGY:
 THOSE WHO MISSED THE PREVIOUS RALLY WAITS FOR
 PRICE TO COME BACK TO MAKE POSITIONS.
Supply and demand zone
Simply...
 Demand/Supply zones are nothing but extreme zones where

sell-off started (supply zone) Demand Zone is an extreme
zone where buyers pushed prices up.
Demand zone
Supply Zone
Supply zone
DEMAND ZONE
Hourly time frame
NOTES
 WHEN A SUPPLY ZONE IS BROKEN IT TURNS INTO

DEMAND ZONE.
 WHEN A DEMAND ZONE IS BROKEN IT TURNS INTO
SUPPLY ZONE.
WHEN PRICE REACHES FIRST TIME TOWARDS THE SUPPLY

AND DEMAND ZONE WE EXPECT THE PRICE TO FALL OR
RISE SIGNIFICANTLY FROM THE ZONE BUT WHEN THE
PRICE KEEPS ON TESTING THE ZONE IT BECOMES WEAKER.
Bank nifty , hourly TF
GAPS
WHEN A ZONE IS TESTED
MULTIPLE TIMES IT
BECOMES WEAKER
Range Contraction
Range contraction
 Remember one thing , market moves from low volatility

period to high volatility period
 Market never moves in a constant volatilty
 Every high volatile market is followed by a low volatile market
 The big move happens in the market , usually after a low
volatility period
 The low volatility period leads to a tight range in the market
 The tight range in the market suggests balance between
buyer’s and seller’s
RANGE
Range in Stock Market.
 In stock market , prices are said to be in a range when buyer’s and seller’s
are fighting it out , and not able to go on either side with full swing.
 In such cases , prices narrow down in a defined range as it struggles to make
a clear decision.
 This is basically known as consolidation where in prices stay in a defined
range.
 A range denotes balance in the market
 Remember every consolidation lead’s to a Big Move.
 Henceforth we wait for the market to come out of the narrow consolidation
to enter and capture the big move on either side ( BUY / SELL )
Supply / demand zone and range contraction
SIMPLE LOGIC TO FOLLOW
 Remember one thing , when a resistance is tested a multiple

times it becomes weaker
 And when a support is tested a multiple times it becomes
weaker
 WHEN A SUPPORT IS BROKEN , IT ACTS AS A RESISTANCE
 When a resistance is broken it acts as a support
 And a breakdown of this level usually leads to a good
parabolic one sided move
 Identifying a tight range can give some amazing profit’s
Multiple retest at resistance
SAME LEVEL BEING TESTED AGAIN AND AGAIN
SUPPLY ZONE
HIGHER HIGHS
Multiple retest at a support ( Buyer’s getting
exhausted )
LOWER HIGHS
DEMAND ZONE
SAME LEVEL TESTED

BAJAJ FINANCE
BAJ FINANACE
TITAN
What really goes behind a breakout ?
 What really happens when the market is inside the range ?

 When the market is inside the range , both buyer’s and seller’s
are in a very comfortable position
 They’re in balance of the current scenario
 Once the breakout happens, one of them start’s to Panic.
BREAKOUT
BREAKDOWN
Possible outcomes after a breakout
 A clear breakout
 A good retest
 A continuation breakout
 Simple a fake out
How to improve Chart Analysis Skills
Outcomes of breakout’s
Another probable scenario
Types of range
 To be frank , it’s silly to name a range breakout setup as range can be

of any type on the chart ( we will see it on the live chart )
 Range simple means contraction in volatility leading to prices
narrowing down to a tight range
 Such tight range represents balance in the market , where both
buyer’s and seller’s are comfortable.
 However once the range is taken out , one of them is trapped which
leads to one sided ( Panic / euphoria ) move.
 The more time the market spends in a range , higher are the chances
for the market to give a strong breakout.
Other types of range
Types of market structure
Market structure - View on a stock
 The beauty of the market structure is that it helps you in

determining the view on a stock
 If the stock is bullish , you look for buy side opportunities , if a
stock is bearish , you look for sell side opportunities , as simple
as this
 Your view matters a lot , it cuts most of the noise and gives
you a clarity of thoughts
Always ask yourself ?
 Where is the stock trading ?

1. Breakout of a range
2. At a supply zone or demand zone
3. In a sideways range
HOW DOES A TREND MOVE ?
Move , pause and move
 A strong trend is usually followed by a good pause

 This pause is nothing but consolidation
 It is the correction , that we see in an uptrend or a downtrend
 This phase is nothing but a simple consolidation , where weak
hands are moved out
 The pause is like a petrol pump , where the car stops , fills the
tank and then moves ahead with momentum
 These pause are considered to be healthy for a strong trend
Recent example of Nifty bank
RELIANCE
GODREJ CONSUMER
Price behaviour
 No doubt , Prices are moved by Supply and demand zone ,

 However drawing a supply / demand zone and actually trading
them are two different things
 Hence forth analysis is fine , but having an entry trigger and
entry system is of utmost importance.
Four important data point’s
 Open
 Low
 High and
 close
Basics of technical analysis – “ Candlestick ’’
Let’s go have a look at candlestick on a chart
 We will use trading view software for the purpose of charting.

 Let’s compare candlestick pattern with other options
available on a chart.
 You must have noticed candlestick pattern reveal so much
information.
Bullish candle stick patterns
Bearish candles
Location comes first , and then candlestick
 Formation of candlestick at important areas of supply zone ,

demand zone and value area is the key , and not randomly on
the chart

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Price

“ Price is nothing but an outcomes of buyer’s

 Price action is nothing but understanding , how the price is

 NOTE: THEY ARE SIMILAR TO SUPPORT AND RESISTANCE

 AN AREA FROM WHERE EXTREME SELL OFF TAKE PLACE.

 AN AREA FROM WHERE EXTREME BUYING TOOK PLACE.

 Demand/Supply zones are nothing but extreme zones where

 WHEN A SUPPLY ZONE IS BROKEN IT TURNS INTO

WHEN PRICE REACHES FIRST TIME TOWARDS THE SUPPLY

 Remember one thing , market moves from low volatility

 Remember one thing , when a resistance is tested a multiple

SAME LEVEL TESTED

 What really happens when the market is inside the range ?

 To be frank , it’s silly to name a range breakout setup as range can be

 The beauty of the market structure is that it helps you in

 Where is the stock trading ?

 A strong trend is usually followed by a good pause

 No doubt , Prices are moved by Supply and demand zone ,

 We will use trading view software for the purpose of charting.

 Formation of candlestick at important areas of supply zone ,

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