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Indigo Share prices – Price action indicates Aggressive Selloff and Liquidation

Indigo and other Aviation industry share prices are falling sharply from last few days. Market sentiment radically shifted from Positive to Negative. Investors and Market participants are liquidating their positions in an Aggressive way. Indigo Share prices tumbled from 1500 to 1200 within 4 trading days; it’s almost 30% decline from its earlier high. This scenario is clearly visible on the Daily chart.

Indigo Shares – Price Action Analysis on Daily chart

Price Action shows trapped traders and Aggressive selloff

From the beginning of Jan till April, Market structure and Price behavior was an Upside directional Range. Some traders might interpret this as a trend, but logically this is nothing more than a range bound market with a direction. By closely observing the structure, we can see both buying and selling pressure. Price swings are almost symmetric in size. Bulls and Bears are engaged in constant battle to find control over Market sentiment.

In the Mid of April, Price action created a false pullback type of formation at 1450 – 1500 and trapped weak hand traders. Later when share prices started to fall sharply at the end of April, these weak hand players were forced to liquidate their positions.

Higher valuation and poor quarterly results are the pre dominant factors which caused aggressive selloff in Indigo share prices. It seems like big players were already expecting and pricing in weak quarterly numbers even before the public announcement of results. By looking at the size of the candles, we can clearly conclude that large order flow has taken place.

Right now it’s pretty clear that Market tone is pessimistic. The selloff is very aggressive; are there any chances for retracements or bounce back in share prices? Or would it tumble even further? Traders should watch the Price action for Answer and trade according to resulting market Behavior.


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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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