Coal India is in down trend – Mark down phase. Prices are tumbling since February 2016 from 330 (which is a decision point and structural resistance level as well) now trading near 230 per share value. Recently downtrend is losing steam and Price action showing signs of Trend termination. Taking short trades is not a good option in the current scenario as Profit expectations are skewed, there is no proper risk: reward. Momentum is fading; “sell on rally” trades are getting riskier. Further selloff in share prices might end up creating a bullish momentum move leading to a shift in sentiment.
There are two possible ways price action and market structure will develop from here onwards – either trend will terminate or trend will continue with an extended down move leading to strong rebound of buying pressure later. In either case we can expect potential Price action trading setups and opportunities on both higher and lower time frame. One more fact is that volatility is declining since the beginning of downtrend and it might rise in coming days as trend integrity gets challenged.
I am going for a trend reversal bet with tight risk management (given the fact I love to catch tops and bottoms, as well as Potential Reward if the trade works out) If Selling pressure is regaining momentum, I would change the trading plan and exit. Traders should watch the developing Price action and trade accordingly. Remember that art of trading is all about catching good trades.
