Thursday, November 29, 2007

RPL Breaking with Good volume



Looks like RPL is breaking with good volume. Technically looks like a good pattern for the following reason
  • Price Closes above 50,21 and 8 EMA.
  • Average daily volume is more than 100%
  • Prices bounces nicely above 50% Fib retracements
Take a look at the chart pattern. Good time to entry. Either I will buy at the market price (Rs 220) Or pull back to 8 EMA price (Rs 210). My stop would be below 50 EMA (Rs 190). Here my rules for number of shares to buy.
  1. Assume that I am buying it at market price for Rs 220 and my stop is Rs 190.
  2. Assume that my account value is 1 lakh rupees
  3. My maximum loss per stock position is 2% of my account size. i.e Rs 2000
  4. Maximum loss per share of RPL is Rs 30 (220-190)
  5. No of shares of RPL to go for is 2000/30 = 66 shares
Please post your comments on this blog. This will help me to refine my future postings. Happy trading and investing.

- Maha
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2 comments:

Sundar said...

This looks like a solid analysis. Keep the stock ideas coming!!

cheers

Sundar Viswanathan
Management Consultant
Austin, TX
USA

November 30, 2007 at 10:30 AM
MTB said...

Interesting strategy..but you have also to define the rule for making profit. This is as much an important rule as the stop loss.

December 3, 2007 at 12:27 AM

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