Today we are going to share how you can trade the stocks which have momentum during the day from the list of stocks shared in the OIAnalytics community everyday.
As an example we will take the Max Financial Services Ltd from today and discuss about the strategy.
Step 1 : Check the stockfut-alerts channel to know where the big money is active and you can also have the stocks from EOD list that we share in your watchlist. All of this at any point of time will not exceed 10 stocks in total.
Step 2 : Now you have the stocks in watchlist and you also know their preferred direction known from either OI builudps or options activity.
By options activity we mean the list of stocks where we share the option strikes that have been active and the rule is that the ITM/ATM options are short by the big money and OTM options are Longs by the big money Based on this rule arrive at a direction that you’re expecting the stock to move in. For Example if the list says an ITM Call option of a particular stock has been active then you need to consider that as a negative indication and BEARISH VIEW on the stock.
Step 3: Watch for Acceleration/Deceleration in these stocks through the Acceleration Bands indicator available on trading view and also include the Price Action Candle patterns by Chris Moody as an additional tools to automatically see the candle action in different colors.
The Idea is to buy a stock which you are already expecting to go UP when it’s closing above Acceleration band on 15 min Interval and put a stop loss of the nearest swing low and ride it till close of the market.
In Similar Way The Idea is to SELL a stock which you are already expecting to go DOWN when it’s closing below Deceleration band on 15 min Interval and put a stop loss of the nearest swing high and ride it till close of the market.
As an additional check ensure if follow-up OI addition is seen on these breakout/breakdowns.
Here’s an example from today on Max Financial Service Ltd.
Step 1 : This stock has been screened by our Alerts in the morning that there are long buildups happening in this stock by BigMoney
Step 2 : Have it in watchlist to see if it’s gathering momentum
Step 3 : Buy when it closes above Acceleration band on 15 mins as seen in the chart below.
Also note that you don’t want to enter the trade in case the breakout above the band happens with a long wick which indicates selling pressure.
Disclaimer: We are not a SEBI Registered Investment Advisor, Please consult your financial advisor before taking any trading or investment decisions.