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PNB Price action | Beware of Traps – Share prices trading near round number

If we look at Price action of Punjab national bank, it’s obvious to spot how one-sided market sentiment is! Whenever sentiment becomes one-sided or skewed, majority of the traders get trapped and prices move in the opposite direction, it’s a common thesis of how the market behaves. Based on current scenario and scandals, the bias is highly one-sided in PNB. It makes sense to be bearish, but the problem is market participants are extremely bearish. Short-term traders should be cautious as price action always creates volatile whipsaws and traps when market sentiment is extreme.

PNB Price Action on 4h chart – Trading Analysis

PNB Share prices trading near round number, Price action may create traps

Take a look at the 4h chart of Punjab national bank stock prices. We can see how market structure has unfolded so far. The movement is clearly one-sided and it’s tempting to take short positions isn’t it? That’s where the problem is! Think how many retail traders or weak hand players would think of going long in this context? No one! Most of them will be thinking to add short positions. Remember – “Weak hand traders get trapped most of the time”. So it’s better stay patient and watch the Market behaviour.

Apart from that, Share prices are trading near psychological round number level 100. Most of us know that trading near round numbers are dangerous, it can act like a support zone and prices may bounce higher to trap weak hand players, so it’s better to exit any short positions. To enter any new short trades – wait for weak rallies and avoid taking trades at random points in. Keep an eye on Price action and developing market structure, trade accordingly. Check the Price action analysis in the attached chart to get better understanding of trading idea.


Trading Predator

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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