Trading NR7 setup

[rohangawale]

NR7 stocks of nifty triggered on 11th aug are:

STOCK		HIGH		LOW
ABB		669.5		652.5
BHEL		2170.1		2117
HDFC BANK 	1387.9		1360
HIND UNILEVER	267		258.55
TATA STEEL	467		449.6

Todays close of NR7 stks triggered on 11th

ABB              657.35
BHEL             2159.2
HDFC BANK        1406.25
HIND UNILEVER    256.75
TATA STEEL       443.7

 

[rohangawale]

NR7 stocks of nifty triggered on 12th aug are:

STOCK		HIGH		LOW
ABB		664.25		650
GAIL		332.55		323.1
HDFC LTD	2307		2250.15
MARUTI		1298.9		1255.8
RPOWER		159.85		155.7
SAIL		164.9		163.3
TATA COMM	467.1		460.1

 

[Satyen]

If you remember, we had seen most of the above points failing in various NR7 days of last 2 weeks but they are turning out to be true in the recent break / the break on budget Monday / the NR days when market reversed from 3920 low recently.


Happy Trading

Dear AW10 if we trade only one break out then it may turn out to be a false one but i have marked after 1/2 Stop hit it finaly gives a trend so we can say these NR7 and two Day NR7 patterns are indicator that in near future we will have a very good trend as you said during expiry week we had a NR pattern it broke out to down side then next day market reverses ........ and then again we find NR days and the finaly the break down and a sweet downtrend

So in my view we need to get out when we sense market not moving as expected .... with min loss or break even and try to get in break outs if happen .......this way we may design a set up around this pattern

Again one doubt when we move our stop to break even i mean after a break out how much move reqired to convince that stop at break even is logical otherwise market may kiss our Stop if placed at break even then resumes as after break out little bit retracement is not uncommon

Waiting your reply

 

[AW10]

You are right regarding you observation on false break of NR7 and then couple of whipsaws that we had seen in recent past.
Our recent exchanges of ideas (Thanks for that) on this topic has triggered me to figure out more about hadling such false breakout. Result of that was my prev post (#396) in which I had mentioned about Ledges/ Consolidation and Trading Range.

While design the system, I will take a step back (go 5000 fts up) and take larger view to figure out what happened before such false breakout had hit me.

Most of the time Ledges (or <4 bar consolidation) works are continuation pattern.
But as it gets extended into Consolidation or Trading range, it starts show the sign
of accumulation / distribution and generally result in trend reversal.

During accumulation / distribution phase after a strong trend, chances of false breakout are high and it is anybody's guess that which breakout will be false or which one will be real. For that we need to go beyond price and get support from other dimension of market behaviour i.e. Time and/or Volume.

I have not backtested this yet..so can't be very specific with my comments. But hope this gives u few more points to think about while I continue my discovery.

Happy Trading

 

[Satyen]

Thanks dear AW10 .......... Waiting for your findings about multi timeframe tading set up using Contracton/Expansion Theory

 

[rohangawale]

NR7 stocks of nifty triggered on 12th aug are:

STOCK		HIGH		LOW
ABB		664.25		650
GAIL		332.55		323.1
HDFC LTD	2307		2250.15
MARUTI		1298.9		1255.8
RPOWER		159.85		155.7
SAIL		164.9		163.3
TATA COMM	467.1		460.1

Todays close of NR7 stks triggered on 12th

ABB               684.55
GAIL              331.55
HDFC LTD          2363.15 
MARUTI            1373.10
RPOWER            163.75
SAIL              170.35
TATA COMM         492.85

 

[rohangawale]

NR7 stocks of nifty triggered on 13th aug are:

STOCK		HIGH		LOW
ACC		855		832.5
AMBUJA CEMENT	105.25		102
AXIS BANK	889		867.1
BHEL		2232.6		2183.2
BPCL		516.4		503.55
CIPLA		288.95		283.1
GAIL**		333.85		327.25
GRASIM		2723		2660.05
HIND UNILEVER	265		258.1
HINDALCO	109		105.3
POWER GRID	112.9		110.6
R POWER **	164.3		161.25
RANBAXY		299.85		292.5
RCOM		265.65		259.25
REL IND		2044		1997
RPL		126.45		123.75
SAIL **		171		165.65
SIEMENS		457.5		446
SUZLON		90.9		87.7
TATA CONSULTA   534.4		519.6
UNITECH 	95		90.6
WIPRO		518.7		507.2

**= 2NR7(yesterday also these stocks were NR7 and today also NR7 Triggered)

 

[rohangawale]

Nearly 22 stocks were triggered NR7 today(13th Aug).
though its and uptrending day with very huge range on nifty, i was/am surprised to see so many stocks on nifty which triggered NR7.
out of 50 stks 22 stks triggered nr7 that too in an huge range day.

im not able to understand how its possible.

AW10 sir, can u pls explain how it has happened?
what would have been the logic behind it??

on normal days also we didnt get so many NR7 triggers.
This is the first time i have saw so many stks triggered NR7 that tooooooo on an exceptional big range day.

 

[MurAtt]

RIL broke out of NR7, Gail and Sail both have broken out.
RIL at 2055 now and GAIL at 346 (already moved much).
Rest not tracking so would not know.

 

[AW10]

Thanks Rohan for bringing out this observation. I don't track Nifty 50 stocks for NR7 hence this is the first time that I am coming across this.

My interpretation is -
Following is the range of Nifty of last 7 days..

13-Aug		129.5
12-Aug		114.4
11-Aug		111.9
10-Aug		162.65
7-Aug		106.7
6-Aug		158.95
5-Aug		88

It is classic case of divergence where index is expanding in range since last 3 days.. but many of its constituents are contracting. That means the few wheels of the train are pulling it in one direction and other wheels are pulling the train in another direction. For the trend or break-out in index to sustain, all components have to be aligned nicely else it raises the question on the strength of the trend. Unfortunately, very few people can see and monitor the internals of the market/index hence get trapped on wrong side in such divergence.

In case of such divergence, any upmove will be weak. You can see the supporting signals of this trend weakness today, as market is finding it difficult to cross 4600.

Many of these stocks should show NR day today as well (50 points range since morning indicates major participants are not interested in trading today). This being a narrow range day and lack of participation from biggies, it is quite vulnerable for false move. Just needs few big orders to make the false move. I won't be surprised by a break-out towards the close which might get reversed on Monday.
Moreover this weeks range is around 256 points so far.. Last 2 weeks also had the range of 250 points.. Giving us 1 week up, next week down, and this week up again. But the range is just 250 points up and down. Typical sign of distribution phase.

Who knows, probably we might be making right shoulder here, We are certainly making an attempt to test the trendline of last upmove from 3920 low (the trendline of upmove from March is already broken and its retest failed when we made second high at 4700). With current divergence between the nifty and its constituents adds as just another factor to be cautious about upmove and trade carefully.
Certainly odds favour the shorts on daily/weekly timeframe.

These are just some of my interpretation. and it is possible that I might read the market wrong. But hope this helps and make you consider few more points in your analysis.

Happy Trading and be cautious at the top.