Intraday Trading Levels for Tata Motors (04/Jan/2011)


The resistance levels are (R1)1304.70, (R2)1312.50, (R3)1320.30 and (R4)1328.15

Pivot (bear in mind that i calculate the pivot value differently) is 1281.25

The support levels are (S1)1257.80, (S2)1250, (S3)1242.20 and (S4)1234.40

I have listed the resistance, support and pivot values. Now how do you trade with these numbers?

Wait for the market to open and stay sharp on the movement of the price. The price must touch and cross R1. When it falls back to R1, go short with a target of pivot price. Sometimes, the price may slice through R1 and R2. Then, short at R2 with the same target price. If the price falls, wait for it to touch and slice through one of the support levels.

One important point which you must note. Always wait for the prices to slice through the resistance / support levels and touch them once again to take your positions. I will be posting a detailed explanation for how to trade effectively using these levels in the upcoming days.

Ironically, the same resistance and support values were applicable on (yesterday) 03/Jan/2011 too. If you pay close attention, you will see that the scrip opened at a price of 1327.7. It rose up to 1335. After spending some time over there, it began to fall and it then touched R4. We went short at that price. The closing price was 1308.45. Total profits of 19.7 points. And that too without applying any complicated charts! See how simple (and profitable) day trading can be!

What happened on this day?

The opening price of the scrip was 1313.90. You can see that it was well above the R2 (1312.50). The price should fall through R2 so that we may go short at that point. As per my calculations, the price did indeed fall through R2. I shorted at that price. After staying sometime below R2, there was a sudden surge in the price – it even touched and crossed R3. As I had shorted at R2, I had kept my stop loss at R3. Seeing the volatile nature of the scrip made me cancel that stop loss. Ironically, the scrip touched the highest price of 1320.60. If I had placed a stop loss at R2, it would have executed and I would have had a failed trade. Luckily enough, the scrip began to fall down once again. This time the fall was rapid. Our original target was 1281.25. However, I squared off at 1289. A profit of 23.5 points. The closing price of the scrip was 1296.

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