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Federal Bank Price action – Panic Mindset of Market Participants

Federal Bank Share prices fell sharply in last two trading sessions. General Market psychology is indicating Panic Mindset of Market participants. We saw the same kind of Market behavior on other stocks recently. For e.g. Indigo Share prices tumbled heavily after poor Quarterly results. Now Federal Bank is following same route, 4h chart clearly shows the present Market conditions.

Federal Bank Share Price Action Analysis on 4h Chart

False Breakout and Gap Down reflects the Panic mindset of Investors

Share prices were in Downtrend during the months of Jan – Feb. Downtrend terminated into Sideways or Range bound market in Mid-February. Price action unfolded into Structural range, formed technical support zone at 88.00 – 90.00 and resistance zone at 97.50 – 99.00. Also please note that resistance zone is close to round number key level 100.00.

In the Month of May, after some extended consolidation near resistance zone (highlighted in yellow mark) Share prices broke the resistance and later turned into a false breakout. This unexpected price action trapped weak hand traders and forced them to liquidate their positions at absolute losses as prices fell sharply within 2 days.

Right after the announcement of Federal bank Quarterly results there was a sharp gap down. This Sharp gap down simply reflected the Panic Mindset of Market participants. Even though technical analysis theory says Gaps are likely to get filled, Traders should be cautious as the market sentiment is negative. Watch the developing Price action in 4h chart and take trades with proper risk management.


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About the Author:

Balaji is a Speculator, Investor and Trader (All in All!!!) and self published author. Trading in the Markets since decade, have seen more ups and downs along with institutional trader's lifestyle. He usually trades Nifty, Bank Nifty, Commodities, Futures cum Options around both Indian and global Markets. Balaji applies highly analytical and systematic Price Action strategies He blogs passionately about Trading strategies, Price Action Trading, Technical analysis, Macro events, Market setups, Financial and Economical topics. Apart from Trading and Blogging, Balaji also mentors aspiring Traders and Investors on becoming successful in highly competitive financial Markets.

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