Why did the price not go lower?

This is a discussion on Why did the price not go lower? within the Technical Analysis forums, part of the Methods category; Hi, I want to know why did the price not go lower after the second long green candle. Just look ...

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Old Oct 2, 2017, 9:57am   #1
 
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Joined Oct 2013
Why did the price not go lower?

Hi,
I want to know why did the price not go lower after the second long green candle. Just look at the first long green candle which is on a huge volume. However on the second green candle the volume is too less. I expected there were only a few buyers and the prices would correct themselves if not fall. Suppose one shorted the stock but the prices went from 435 to 495. Going just by price and volume why
did this happen?
Please see the attached pic.
Stock : Bharat Forge
Trading on NSE
Attached Thumbnails
bharat-forge-8.jpg  
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Old Oct 2, 2017, 10:02am   #2
 
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Technicals only sometimes work. Quite erratic.
Many say they are next to useless.
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Old Oct 2, 2017, 10:04am   #3
Joined Apr 2016
It didn't go down because the price is going up.
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Thanks! The following members like this post: piphoe
Old Oct 2, 2017, 10:24am   #4
Joined May 2012
Quote:
Originally Posted by clarkeharry View Post
Hi,
I want to know why did the price not go lower after the second long green candle. Just look at the first long green candle which is on a huge volume. However on the second green candle the volume is too less. I expected there were only a few buyers and the prices would correct themselves if not fall. Suppose one shorted the stock but the prices went from 435 to 495. Going just by price and volume why
did this happen?
Please see the attached pic.
Stock : Bharat Forge
Trading on NSE
There are obvious differences between the two WRB. The first is a green candle. Prices basically open at the low and traded up and closed near the high on high volume. Typically this is a sign of real demand. The second candle while green, has an initial gap down and traded down briefly and thereafter rallying to close near the high but on much smaller volume. I would suspect the second candle reacted on some kind of news. I think the retail end views it as bearish news but the institution end probably sees it differently. It is basically a trap and what the trade would called it as an amateur gap play.
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Old Oct 2, 2017, 10:31am   #5
Joined Feb 2002
Don't depend on volume. In fact don't depend on any single indicator.

The best indication of where price will go is what price has just been doing. Price was rising up to your second marked candle, and the low of even this large range bar didn't breach the low further back in the uptrend. Lay a 20EMA and a 50EMA over this chart and I bet you will find price at the close of this candle is above the 20, the 20 is above the 50, and the 50 is rising, all useful clues that an uptrend is in place.

I don't have a clue why price did not fall, but you were shorting against an uptrend so its the wrong question anyway.
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Old Oct 2, 2017, 10:44am   #6
 
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clarkeharry started this thread
Quote:
Originally Posted by Pat494 View Post
Technicals only sometimes work. Quite erratic.
Many say they are next to useless.
Yeah Pat, technical analysis works at times only. Thats why we should have a stoploss. For me patience is the most important virtue in markets.
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Old Oct 2, 2017, 10:45am   #7
 
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Quote:
Originally Posted by EnlightenedJoe View Post
It didn't go down because the price is going up.
Accepted. But the prices should have corrected before going up. I expected the prices to go down to the middle of the candle before going up.
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Old Oct 2, 2017, 10:48am   #8
 
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Quote:
Originally Posted by Brumby View Post
There are obvious differences between the two WRB. The first is a green candle. Prices basically open at the low and traded up and closed near the high on high volume. Typically this is a sign of real demand. The second candle while green, has an initial gap down and traded down briefly and thereafter rallying to close near the high but on much smaller volume. I would suspect the second candle reacted on some kind of news. I think the retail end views it as bearish news but the institution end probably sees it differently. It is basically a trap and what the trade would called it as an amateur gap play.
Yeah, the first candle is a sign of real demand. But the second is not. Thats why the prices should go down a bit. But they never retrace, never correct on so low volume but continues upwards.
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