(52 Week Low Stocks 2023) Best Analysis – Aarti Ind.

Overview

52 week low stocks- Lets understand how to define a trading strategy based on basics of market structure and price action. We will understand how to see the market structure , where the current state of the market can be analyzed. Once we know the trend of the market , we can deploy trading strategy based on further analysis on price action , candle stick patterns , volume analysis and so on. Lets take example of the stocks Aarti Industries ,the future and option stocks trading on NSE . Aarti Industries is currently traded at its 52 week low price.

We will first do multi time frame analysis to understand its market structure. Lets see weekly and Daily timeframe and analyze what is the current stage.

Market Structure – Trend Identification

Well , we can define trend of any market by following methods.

  1. Naked Eyes : Plot candlestick , or line graph on a chart and see the slope of the trend with naked eyes. If we see the slope upwards , then the market is in uptrend . If we see the slope of the chart downwards , then the market is in downtrend. In above example of Aarti Industries chart , price slope is seen downwards , then the trend is down.
  2. High / Low formation : Check highs and lows formation on the chart. See in weekly chart of Aarti Industries, we can see prices are making lower lows and lower highs on the chart , it means the trend is down. Mostly we can see this patterns on 52 week low stocks list.
  3. Moving Averages: It is understood that any market trading below certain moving averages are in downtrend and above moving averages should be seen as in uptrend. 200DEMA ( 200 day exponential moving average) is widely accepted moving average to define the trend of any market. We can see Aarti industries prices on weekly chart is trading below the 200 DEMA. That means the trend on weekly timeframe of Aarti Industries is down trend.
52 week low stocks - Aarti Industries weekly chart

See the above chart of Aarti Industries on weekly timeframe .

Based on High/Low formation , moving averages and naked eye , we can see that the trend of Aarti Industries on weekly timeframe chart is down trend.

Now lets see on Daily timeframe.

In above daily chart of Aarti Industries , we can see the prices are making lower lows, and at 52 week low stocks indicating a downtrend. Now we have seen that on weekly timeframe and on daily timeframe , the current trend is down trend. Now lets see the priceaction and what the traders doing in this stock.

Market Structure – Price Action

In Aarti Industries daily chart( 52 week low stocks) , we can see a long consolidation below 200DEMA. Prior to consolidation , the trend was down. So we should look for any price action pattern , candle stick pattern or any other indicator which confirms the continuation / reversal from the prior downtrend before consolidation. Lets see what we found from the daily chart.

Price action

See above image and try to understand whats happening on Aarti Ind. daily chart .( 52 week low stocks) Prices have consolidated in a trading range below 200DEMA. Now trying to break the range downside. So price action telling us that Aarti Ind. stock is in downtrend. Prices consolidated and now again breaking the range downside , which shows the trend continuation. So to stay with the trend , trend following traders have to take confirmation and initiate the short trade in the stock.

Market Structure – Trade Confirmation.

Before taking a position after understanding market structure , traders should watch for some confirmation through any indicator or volume analysis .Traders using RSI , MACD to take trading decisions. Lets see what we can check.

We can confirm the trend or price action by following ways

  1. We can see consecutive red bars , indicating increased selling pressure.
  2. Volumes are increasing with declining in the price
  3. RSI is the momentum indicator . RSI showing below 40-oversold zone. Since RSI is a momentum oscilator , we can predict that now downside selling momentum will increase in the stock.
  4. its among the 52 week low stocks. ( use scanners to identify 52 week low stocks)

We check market structure – market is in downtrend. Price action suggesting that a new down trend is being started after breakdown of the consolidation range. Indicators like RSI , volumes suggesting selling pressure in the stock and upcoming down momentum. Now lets plan our trade.

Aarti Industries – Short Trade Plan

Above is the trade plan for Aarti Industries . As we analyze on daily timeframe , so this would be a swing trade based on time frame.

We can plan the trade as below.

Short entry – at current price 472

SL – at 502 ( recent swing high)

Target – 382 ( calculate rectangle height and set 1:1 target )

Traders should manage the trade after entering in. Risk Management is the prime key for trading success . Some traders trails their SL as the prices keep declining. We can spot other 52 week low stocks and apply this learning on it. There are scanners that give us results on 52 week low stocks.

Lets track this trade and learn from these information.

3 thoughts on “(52 Week Low Stocks 2023) Best Analysis – Aarti Ind.

  1. Pingback: Inside Bar Candlestick - A powerful price action pattern. "Price Action Trading - 4" - tradingstocksprofitresearch

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