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Entry and exit levels

For every trader/investor in the stock market , the first challenge is to identify the entry and exit levels, with a proper analysis of risk. 2nd challenge is executing the decisions , without being influenced by emotions while on trading screen , others opinions etc.

Its true that buy right & sit tight approach is perfect . however , when one uses support and resistance for entry or exit , probability of higher returns become more pronounced. Timing is very important in stock market . there are many approaches to identify support and resistance based on technicals and others . two important approach to identify SUPPORT AND RESISTANCE are based on ma ( moving average ) and price action. Each have their own pros and cons.

1. Moving average

Pros -    mostly ma levels are obeyed by non volatile stocks under normal conditions

Cons - not applicable in volatile stocks
illustrations -
Bajfinance for period 2017 to may 2019

The 50 ma on weekly chart can be used as an entry point . three entry signals are generated .
Signal 1 @ 850     Jan 2017
Signal 2 @ 1550   Feb 2018
Signal 3 @ 2000   Oct 2018

Exit signal - ma 100 on weekly chart

2. Price action

Pros - generally stocks obey previous support and resistance

Cons - no such price action  during panic ( excessive buying or selling )

illustration
Yes bank
Support range  - 150 to 130

This range was the resistance level in late 2015 and now it is acting as a support level . probably , the stock may consolidate at this range before beginning its upward journey . if not , the next support is around 100.

Entry levels -
Signal 1 - around 150
Signal 2 - around 100

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