The Price Action of this stock simply repeats the profound wisdom of successful trading, “Patience and Prudence over emotions.”
Here we have a good example of the market punishing the Emotional traders who bought the stock due to FOMO – Fear of missing out on the potential returns.
The stock is none other than one of the famous financial sector heavyweights – HDFC Asset Management Company (NS:).
Take a look at the Price Action over here…
HDFC (NS:) AMC – Price Action on 1D Timeframe
The company announced the dividend during the period of June-July 2022. Post the announcement of the dividend, stock prices started to move up.
So far, HDFC AMC stock prices have rallied all the way from 1700 to 2100.
To understand the market behavior and get some more clarity, let’s dig deep into Lower timeframe Price Action.
HDFC AMC – Price Action Analysis on 4h Timeframe
If you notice the chart, in the middle of August, emotional traders and uninformed buyers bought the stock in panic and in the fear of missing out on a trade.
As a result, stock prices shot up from 2000 to 2200 within a day.
Quickly, within the next few candles, prices reversed and all those emotional traders who bought at the peak got trapped by the market reversal.
This is why taking emotional decisions in trading is bad! The market often traps uninformed emotional traders.
Right after a shakeout and forcing emotional traders to exit at a loss, prices are bouncing up again from the support zone in 1975.
So next time, when you see panic movements in the prices, fade them. You can also cultivate a Probability mindset for trading, which will help you to prepare psychologically against such moves.
To learn more about the Probability Mindset, check out the video given below.
What do you think about HDFC AMC Stock prices? Leave your thoughts in the comment section.
Leave a Reply