You can save LAKHS of your capital by knowing this simple concept of parabolic/vertical move in stocks.
The 90 degree angle inflection point in a stock is a signal to book profit.
Collaborated with @AdityaTodmal
The 90 degree angle inflection point in a stock is a signal to book profit.
Collaborated with @AdityaTodmal
1/ What is a parabolic move?
A parabolic move occurs when the speed at which the stock’s price goes up increases exponentially.
In other words, a parabolic stock is a stock that starts going up really fast.
A parabolic move occurs when the speed at which the stock’s price goes up increases exponentially.
In other words, a parabolic stock is a stock that starts going up really fast.
2/ #IRCTC example:
Monthly TF:
Back to back 6 green candles (each candle represent a month here), so no profit booking has happened.
The angle towards the end of the upmove became much steeper i.e. 90 degree.
Such moves are highly susceptible for a bend in the trend.
Monthly TF:
Back to back 6 green candles (each candle represent a month here), so no profit booking has happened.
The angle towards the end of the upmove became much steeper i.e. 90 degree.
Such moves are highly susceptible for a bend in the trend.
Weekly TF #IRCTC
In the week of Oct 18, 2022 this stock witnessed a huge red candle in the entire chart history of the stock along with the highest volume bar, indicating a clear change of trend.
Pls note: This chart is prior to the stock split in the ratio of 1:5.
In the week of Oct 18, 2022 this stock witnessed a huge red candle in the entire chart history of the stock along with the highest volume bar, indicating a clear change of trend.
Pls note: This chart is prior to the stock split in the ratio of 1:5.
3/ #BITCOIN example:
Similar pattern was observed in BTC/USDT pair #BITCOIN
and then BTC fell ~50% from its high made in the month of March 2021
Similar pattern was observed in BTC/USDT pair #BITCOIN
and then BTC fell ~50% from its high made in the month of March 2021
Current Status of #Bitcoin BTC/USDT pair:
9/ When prices rise in almost vertical/90 degree fashion, they form a parabolic curve, we should be cautious.
Because of the purchasing frenzy that drives parabolic moves, we never know when the final top will arrive.
Because of the purchasing frenzy that drives parabolic moves, we never know when the final top will arrive.
However, we know that vertical moves cannot be sustained, and we can expect the parabolic to collapse, with prices falling as swiftly as they advanced.
10/ The result of the extreme Angle of Ascent is a early warning signal or a red flag.
The stock is at risk of profit taking that may turn into a slide downward.
The stock is at risk of profit taking that may turn into a slide downward.
11/ Folks who are looking to buy such stocks (from investing perspective), remember that there will be some bounces however the stock will hit resistances at the higher levels.
Usually stocks may witness some sideways dull action before the changing its trend.
Usually stocks may witness some sideways dull action before the changing its trend.
The stock would usually try to form a base, before giving a trend.
So no point in tying up capital when there is no momentum.
So no point in tying up capital when there is no momentum.
12/ Characteristics of a parabolic move:
1. Very fast upmove in a short span of time.
2. Only higher high candles in weekly or monthly TF.
3. Absence of any profit booking
4. Witnessing 3x to 10x returns in a span of 6 months to an year.
1. Very fast upmove in a short span of time.
2. Only higher high candles in weekly or monthly TF.
3. Absence of any profit booking
4. Witnessing 3x to 10x returns in a span of 6 months to an year.
5. Post 3x or 6x usually reports from Investment Banking firms about stock doubling or tripling from that level.
6. Hype surrounding the company on social media
7. Merger deal announcement (HDFC twins check the parabolic move on a shorter TF)
6. Hype surrounding the company on social media
7. Merger deal announcement (HDFC twins check the parabolic move on a shorter TF)
8. Pleding of promoters shareholding rises in this period
You may find any or combination of the few characteristics that are listed out.
You may find any or combination of the few characteristics that are listed out.
No matter how good the fundamentals look, always do check the charts and if you find any of the above characteristics especially 1 to 4 then just ignore or book out.
Because price is and shall always remian a lead indicator.
Because price is and shall always remian a lead indicator.
13/ Conclusion:
Parabolic up moves are exciting to ride, but there is the almost CERTAIN danger that the rocket will run out of fuel, resulting in a rapid collapse of prices.
Parabolic up moves are exciting to ride, but there is the almost CERTAIN danger that the rocket will run out of fuel, resulting in a rapid collapse of prices.
We are finally on Youtube!!
We have a free Youtube Channel where we cover our analysis of the markets.
Checkout using this link:
youtube.com/@MarketPulsewi…
We have a free Youtube Channel where we cover our analysis of the markets.
Checkout using this link:
youtube.com/@MarketPulsewi…
If you enjoyed this thread here's another one:
https://twitter.com/niki_poojary/status/1591304230576345088?s=20&t=Y8_Zb-ljuASDSce8nunoag
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