Reversal Stocks Part 1 | 3 Reversal Stocks | CA Rachana Ranade

"let's take the the example of arcade developers okay so recently uh a comparatively recent listing you can see here this is September 24th and what you can see here low high a lower low again a lower high and again a lower low so if I were to just draw these and if I were to just join the lows here very clearly you can see that a lower low has been formed in the price so is the price showing weakness yes is the RSI showing weakness so for that let us just take RSI into a half screen Zone and let's say from here in the same time frame from here let me draw this till here okay can you very clearly see that the price has formed a lower low but RSI has formed a higher low and this means that the pace at which it was falling the strength which would it it was falling that is drying up now and there could be signs of bottoming out and there could be signs of reversal"

"on the monthly Candlestick of GRSC and if you see here right from October 18 till almost Jan Feb March 22 the stock was in an absolute sideways Trend barely there were any volumes barely any interest in the stock this is where we can see two three back toback volume shoots and backed by some price rise as well it may not seem very big here but if I were to just tell you how much was the price rise in just these three four five months from here to here this is almost 147% rise in 1 2 3 4 5 months and if you can see here the volume has also been increasing in these five months so always remember a price rise backed by a volume rise shows strength in the stock okay can we see a repeat telecast here yes absolutely 1 2 3 4 four candles back to back we we can see a price rise and backed by even good volumes what do you see in this last leg 1 2 3 huge four 1 2 3 four in fact four back toback huge green candles and backed by a very good volume so that again shows that yes the strength was absolutely there in the price rise"

"but what happened here absolutely at the top we can see that the upper Wick is also pretty big and from here actually the selling pressure started which continued for next one two 3 months back to back now I want everyone to pay attention on this very important point that though the stock price has been falling I mean from this topmost point till this bottommost point the stock is corrected almost like 50 plus % okay barely four five months the stock is corrected almost 50% but this fall these red candles you can see the volume as well now look at the buying volume and look at the selling volume and that shows that the strength in the sellers is not that high as compared to the strength in the buyers okay so somewhere there could be chances that the sellers may get tired at one point in time they may stop selling actively and that is where the buyers could step in"

"now here you can see that a pin bar or a hammer has been formed towards the end of this down move now again as I mentioned right in the price action analysis course I've also talked about the Logics behind this Hammer candle now the moment many people see this Hammer candle they like a reversal done I'm going to buy no no wait wait one basic mistake that's that's what people do is that ideally what we should do is we should draw a line here just at the high of the pin bar at the high price of the pin bar if the next month's candle closes Above This level convincingly with volumes then I can say that yes this could be a sign of a reversal"

"the stock is comparatively recent listing listed in September 2024 you can see the first month the price was solid the volume was also good but post first month the stock started to see a good selling pressure but the point to be noted is that though the price has dropped pretty much you can see that the sale volume is not that great right after this we could see a big green candle recently that is on the 26th of November this is a 20% upper circuit kind of candle and you can see that was also backed by good volumes but what is more interesting is what happened on the immediate next day after this 20% we could see a gap up candle so I'm just going to draw a small line here so that okay okay so that I we can identify okay this was the Gap that was created right now let's also check what was the volume here you can you can see here this this Gap up candle volume was also amazing the stock went in a sideways trend for 2 three days and then what happened is we call this as a classic Gap filling Theory so as per the Gap filling Theory it is said that if a gap is created typically the sellers would put some pressure and at and the Gap would be filled if the Gap is filled at that point in time buyers again become active and they take the stock price higher if the sellers still become more and more powerful there is a chance that the Gap is not only filled but the Gap is cracked further and the stock could see further selling pressure what has happened in this case in this case the Gap theory has been honoured by few paise I think uh the cap has not been filled but that is absolutely okay after which we after which we could see that yes the buyers became active and the stock price Rose almost 3% on that day and today as I shoot the video the stock is already up oh 5 and a half% the stock is up with good volumes as well now could we see one more Gap to answer is yes in the immediate on the immediate second day you can see that yes there was a gap which was created and this has also been filled in the last 2 three days so all in all good signs of Gap uh whatever gaps were created they have been closed now volumes you can see these selling volumes versus these buying volumes again very clear signs that yes buyers the price is being taken upwards with volumes"

"not only Gap filling has happened this is called as an IPO base formation Breakout that has also happened today as I shoot the video it is very important that the stock should close above this and then we can say it's like a IPO based formation"

"now what you have to do is you have to check the uh chart pattern for Raymond lifestyle study the chart Raymond lifestyle and you have to tell me whether there is a reversal that you can identify in the stock based on either of the four of the parameters number one can you see an RSI Divergence number two can you see RSI Divergence but confirmation is pending possibility number three is it based on price action analysis and possibility number four which be there is no reversal"

"if we can try and analyze or if we can try and short list few indicators which can tell us about stock reversals stock price reversals if we can try out uh if we can try and find out two three mistakes that people typically do while picking up reversals if we can discuss that I think it'll bring in a good value addition to your knowledge and that's what we're going to discuss in today's video we're going to talk about three different different types of uh signals for reversals indicators for reversals and common pitfalls as well"

"the very first indicator that we are going to discuss is RSI Divergence"

"if we see an RSI Divergence what does this mean that is the stock falling yes but the strength I mean not not the strength I can say the pace at which it can fall the power with which it can fall that power is drying out now so the fall could be there but the fall would dry up and soon it may take a support somewhere and would start reversing from there"

"what has the RSI shown in the same time frame we can see a a low and a lower low this shows that the strength in the up move is missing and there are great chances that this strength could dry up soon and we could see the stock topping out and reversing from there"

"ideally try and get more and more confirmations and one simple confirmation could be is the previous swing High broken or not see this is the previous swing high if this is also broken you can see obviously the stock had stopped there for 1 2 3 days and then 4th day it showed good signs of strength right so this is also what we have to ideally check is the previous swing High broken or not if yes then again there are great chances that it may continue its Journey"

"all of them requested that if you get could get a price action analysis 2.0 challenge I brought that in front of them and then they said we are still wanting to learn more and more on so it would be great if you could come up with a separate course on price action analysis and as a teacher it feels really good that if students by themselves demand something from the teacher that we want to learn this if you could you know draft a course and tell us or teach us it'll be much more fruitful and that is where me and my team members we sat down we discussed what could be the different concepts that could be taught in this"

"in technical analysis 2.0 I've taught about swing trades of course everyone knows I am totally in you know a position of something like intraday trades and all that but yes I do believe in swing trades so I've taugh about how can you take swing trades based on technical analysis but in price action analysis we have focused on how technical analysis can be used even for longer term trades so that's one big difference second difference is that in technical analysis 2.0 I've talked about Candlestick patterns chart patterns indicators I've taught all of these but in price action analysis we have gone into the Logics of the candles so for example if I were to say that okay uh this is a pin bar or this is a hammer then what is the logic behind the formation of this hammer or formation of this pin bar all these Logics based on demand Supply analysis is what we have covered in price action analysis course"

"number one I've talked about Buy add sell system so many people understand when to buy but they don't understand when to add that is what has been covered when to sell okay how to set stop-loss how to Trail stop loss has also been covered in this course second how sectoral rotation works that has been covered in this course third we have talked about a very very interesting concept which is called as stage analysis that is what we have covered in this course one more Super interesting point how do you trade in Bull markets versus how do you trade in bare markets these points have been discussed in course concept of core satellite portfolio concept of VCP"

"the course is set to release uh I mean that that has already been released in fact yesterday that is on the 5 th uh so on the 5th uh the first four lectures or the it's a total 7 hours course so first four uh lectures have been uh released yesterday tomorrow that is on Saturday uh balance three lectures will be released so with that the entire course will be in front of you by Saturday by tomorrow"

"let's move on with the third methodology for identifying reversals and that is based on Gap Theory"