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Old 12-04-2009, 01:56 PM
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Default Learning Wyckoff by Example

I have been researching Wyckoff method from past couple days and analyzing charts etc I thought it will be a good idea to discuss my learning by example in the forum. I hope this will be helpful for other Wyckoff newbies :nod: Appreciate any feedback from the experts
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Old 12-04-2009, 02:02 PM
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Default Wyckoff Accumulation Schematic in RPL

This is Wyckoff Accumulation Schematic analysis RPL daily chart. I tried to put some explanation in the chart itself so that it will be easy to understand, but each phase is explained in detailed in this post. This is going to be a long post with big chart, please dont mind There is a lot of terminology to by-heart before reading the chart to follow better :nod:



RPL Wyckoff Analysis by phases:

Phase - A: Here supply is more then demand so price is moving down. After a lengthy down move, wide spread candles and big volumes represent that down move is reaching Selling Climax (SC) and the panic selling is ON. This panic selling is mostly absorbed by the professional traders. In RPL, selling stops at 69.75 level (10/27/2008). Automatic Rally (AR) comes up as the professional traders start showing some interest, so short covering or a weak rally starts with low volumes compared to the down fall. RPL reached 97.4 levels in this Automatic Rally (11/05/2008). Now, high of AR at 97.4 acts the resistance level and low of SC at 69.75 acts as support level. This becomes Trading Range (TR). When AR reaches climax, price again starts moving down with low volumes and small spread and retests the SC to test the balance in the “demand and supply”, which is called Secondary Test (ST) of the SC. RPL did Secondary Test at 68.25 (11/20/2008). In this down move to ST, I feel low volumes are compulsory because of diminished supply. If supply is high then it’s just a retracement not Secondary test.

Phase - B: Price moves into trading range with higher volumes compared to the down move (SC) as demand increases. Due to this “Cause”, Effect is price moves up and the spread is high. Effect is proportional to Cause. If Cause is high then we see big spreads and high volumes, which give the fast up moves. Due to high Effort (Volumes) Price reaches the resistance levels. Here RPL reaches 94.15 levels (12/22/2008). We can see shooting star, which is bearish signal and the high volumes indicate supply is more. When supply again increases and the price starts moving down. Price mostly moves in the trading range in this phase.

Phase - C: Spring (nothing but bear trap) occurs as prices moves down breaking the previous support on the low spread and volumes. Here we can see 2 bars (2nd and 3rd March 2009) with low spread and high volumes. This is an indication of the absorption of supply going to strong hands, or composite man is accumulating the huge sell-off. Next comes the wide spread red bar (3/5/2009) with comparatively low volumes and the Reaction Bar with low of 68.5 (3/6/09), which is lowest point of the spring. When the retest is done and price retraces into TR, the price starts moving up with comparatively higher spreads and high volumes.

Phase - D: Price starts moving towards Creek and breaks through it with higher spread and volumes. RPL broke out at 99 (4/1/09) and the gap up on next day indicates higher demand, with moderately higher spread and volumes. Here we got green candles with wide spread and high volumes compared to red candles spread and volumes. But in my view, volumes on the green bars should be little more, to show the higher demand over supply.

Hopefully we may see some up move in this scrip from here.

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Old 12-04-2009, 02:56 PM
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Originally Posted by Kiranb View Post
This is Wyckoff Accumulation Schematic analysis RPL daily chart. I tried to put some explanation in the chart itself so that it will be easy to understand, but each phase is explained in detailed in this post. This is going to be a long post with big chart, please dont mind There is a lot of terminology to by-heart before reading the chart to follow better :nod:



RPL Wyckoff Analysis by phases:

Phase - A: Here supply is more then demand so price is moving down. After a lengthy down move, wide spread candles and big volumes represent that down move is reaching Selling Climax (SC) and the panic selling is ON. This panic selling is mostly absorbed by the professional traders. In RPL, selling stops at 69.75 level (10/27/2008). Automatic Rally (AR) comes up as the professional traders start showing some interest, so short covering or a weak rally starts with low volumes compared to the down fall. RPL reached 97.4 levels in this Automatic Rally (11/05/2008). Now, high of AR at 97.4 acts the resistance level and low of SC at 69.75 acts as support level. This becomes Trading Range (TR). When AR reaches climax, price again starts moving down with low volumes and small spread and retests the SC to test the balance in the “demand and supply”, which is called Secondary Test (ST) of the SC. RPL did Secondary Test at 68.25 (11/20/2008). In this down move to ST, I feel low volumes are compulsory because of diminished supply. If supply is high then it’s just a retracement not Secondary test.

Phase - B: Price moves into trading range with higher volumes compared to the down move (SC) as demand increases. Due to this “Cause”, Effect is price moves up and the spread is high. Effect is proportional to Cause. If Cause is high then we see big spreads and high volumes, which give the fast up moves. Due to high Effort (Volumes) Price reaches the resistance levels. Here RPL reaches 94.15 levels (12/22/2008). We can see shooting star, which is bearish signal and the high volumes indicate supply is more. When supply again increases and the price starts moving down. Price mostly moves in the trading range in this phase.

Phase - C: Spring (nothing but bear trap) occurs as prices moves down breaking the previous support on the low spread and volumes. Here we can see 2 bars (2nd and 3rd March 2009) with low spread and high volumes. This is an indication of the absorption of supply going to strong hands, or composite man is accumulating the huge sell-off. Next comes the wide spread red bar (3/5/2009) with comparatively low volumes and the Reaction Bar with low of 68.5 (3/6/09), which is lowest point of the spring. When the retest is done and price retraces into TR, the price starts moving up with comparatively higher spreads and high volumes.

Phase - D: Price starts moving towards Creek and breaks through it with higher spread and volumes. RPL broke out at 99 (4/1/09) and the gap up on next day indicates higher demand, with moderately higher spread and volumes. Here we got green candles with wide spread and high volumes compared to red candles spread and volumes. But in my view, volumes on the green bars should be little more, to show the higher demand over supply.

Hopefully we may see some up move in this scrip from here.



Fantastic,thks ,very easy to understand Analysis,plz keep them coming to understand this better.
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Old 12-04-2009, 02:56 PM
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Good work Kiran.

If you can also study Open Interest ( Delivered quantitiy) in cash
will add to our understanding . This data is available from NSE for
cash scrips too. I am using GetBhavCopy which fetches OI for cash too
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Old 12-04-2009, 03:43 PM
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Originally Posted by uasish View Post
Fantastic,thks ,very easy to understand Analysis,plz keep them coming to understand this better.

It is really nice to get such compliments from you sir. Thank you.

Originally Posted by Ajax View Post
Good work Kiran.

If you can also study Open Interest ( Delivered quantitiy) in cash
will add to our understanding . This data is available from NSE for
cash scrips too. I am using GetBhavCopy which fetches OI for cash too

Thank you very much Ajax sir, will surely try.
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Old 12-04-2009, 04:16 PM
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Originally Posted by Kiranb View Post
Automatic Rally (AR) comes up as the professional traders start showing some interest

Just to add something here, an Automatic Rally doesn't always mean that professional traders are showing interest. An AR represents an over-extended range and happens when participants suddenly realize that the orders that were driving the markets have dried up and they start hurrying to cover their shorts/book profits etc. :nod:

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Old 12-04-2009, 09:18 PM
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Originally Posted by CreditViolet View Post
Just to add something here, an Automatic Rally doesn't always mean that professional traders are showing interest. An AR represents an over-extended range and happens when participants suddenly realize that the orders that were driving the markets have dried up and they start hurrying to cover their shorts/book profits etc. :nod:


hummm...
should be true for most of stock and NF right now....????
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Old 12-04-2009, 09:32 PM
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Originally Posted by deuterium View Post
hummm...
should be true for most of stock and NF right now....????

Mixed up definitions

ARs are short-lived and basically dont have it in them to create 'range extensions', the current move in NF is definitely 'initiative' in nature and not ARs.

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Old 13-04-2009, 08:22 AM
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Awesome work, Great going kiran.

Regards,
rajendrani
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Old 14-04-2009, 12:31 AM
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...May be not the right thread.... but no other apt thread either...

Check the chart and comment ...

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