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Unveiling Opportunities in Trading: NAUKRI Stock Case Study

ANALYSIS DATE: 10-01-2024

Understanding and successfully executing trades involve a combination of analysis and precise execution. In this blog, I will explain you how I identified an opportunity in NAUKRI, executed the trades, and managed risk, emphasizing the practical aspects that often determine success in the market. It's crucial to understand that analysis is only part of the equation; it's the execution that truly turns insights into profits. My goal is to expedite your learning curve by providing you with insights that can make a significant difference in your trading journey.

Analyzing NAUKRI Trade Setup:

Let's focus on the chart of NAUKRI on my trading view, examining a trade setup from the 8th of March. At that time, NAUKRI had experienced a substantial correction and was hovering near a critical support zone. Identifying potential reversals requires a multifaceted approach, and in this case, it paid off.

Figure: 75- Minute Timeframe of NAUKRI

1. Strategic Entry and Profitable Exit

Our entry point was strategically timed around the 9th of March, and we exited in July, holding the position for over four months. During this period, we witnessed a 28% profit, showcasing the effectiveness of our approach.

2. Mastering Trend Direction

Key to this success was understanding the trend direction. I use multiple time frames, from monthly to 3-minute intervals, to gauge the trend's strength. This aligns with my philosophy of trading in the direction of the primary trend.



Utilizing Elliot Wave Theory for Swing Trading

Now, let's talk about the weekly time frame, where we can see NAUKRI had experienced a significant correction of 53%. In my watch list of 100 stocks, I keep a close eye on those showing signs of bottom reversals. This is crucial for swing trading, as these stocks often present lucrative opportunities.

Leveraging Elliot Wave Theory

Elliot Wave Theory played a pivotal role in anticipating potential upswings. If you're serious about becoming a proficient swing trader, consider delving into the principles of Elliot Wave Theory.

The Importance of Technical Indicators

NAUKRI journey included testing support levels, encountering EMAs (Exponential Moving Averages), and experiencing price bounces. The 200 EMA on the weekly time frame emerged as a critical indicator. Observing its behavior on the daily time frame, especially during retracements, provided valuable insights.

Recap of Initial Entry Decision

Let's kick off this deep dive by revisiting a pivotal trade involving NAUKRI. Meticulously noting the rationale behind the initial entry decision, we focus on the positive divergence observed in the 75-minute timeframe. This retrospective analysis sets the stage, providing a comprehensive understanding of the entry trigger.

Overview of Holding Decision

As the NAUKRI trade unfolds, understanding the reasoning behind the decision to continue holding the stock becomes paramount. Delving into my notes, I gain insights into the factors contributing to the decision, emphasizing the potential for substantial returns within the context of NAUKRI's market dynamics.

1. Identifying Timely Entry with NAUKRI

Moving deeper into the NAUKRI trade, I explain the meticulous process of identifying a timely entry using the 75-minute timeframe. This involves a granular examination of positive divergence and the bullish range shift in the Relative Strength Index (RSI) specific to NAUKRI, providing a bespoke understanding of entry points.

2. Setting Stop-Loss Levels for NAUKRI

Risk management takes center stage as we explore insights into the critical process of setting stop-loss levels based on various timeframes, tailored to NAUKRI's behavior. This involves a careful examination of risk factors unique to the stock, safeguarding positions from unexpected market movements.

3. The Role of RSI in Momentum Analysis for NAUKRI

A dedicated exploration unfolds, delving into how the Relative Strength Index (RSI) is employed to detect subtle changes in NAUKRI's momentum. I compare RSI signals across different timeframes (15-minute, 75-minute, and daily), offering a bespoke perspective on momentum shifts for NAUKRI.

4. Revising Stop-Loss Levels for NAUKRI

The journey with NAUKRI unfolds further as we explore the importance of revising stop-loss levels, particularly as the stock maneuvers through resistance points. Strategies for trailing stop-losses in NAUKRI's evolving trade, balancing caution and aggression, are expounded upon.

5. Avoiding Premature Exits for NAUKRI

Realization and reflection on the need to avoid premature exits, especially with negative divergences specific to NAUKRI, become pivotal. This bespoke insight underscores the importance of patience and a thorough understanding of NAUKRI's market dynamics.

Adapting to Market Dynamics with NAUKRI

1. Utilizing Volume Analysis for NAUKRI

The unique landscape of NAUKRI's market dynamics prompts a dedicated exploration of utilizing volume analysis to gauge the strength of upside movements. Lessons from past NAUKRI trades are integrated to refine stop-loss strategies, ensuring a proactive stance in response to NAUKRI's specific market dynamics.

2. Balancing Negative Divergences for NAUKRI

Balancing the impact of negative divergences on shorter timeframes specific to NAUKRI with the potential for extended upside is discussed, offering a bespoke perspective on risk and reward within the context of NAUKRI's trading behavior.

3. Impact of Exiting Prematurely for NAUKRI

Acknowledging the impact of exiting a NAUKRI trade prematurely due to negative divergence is explored. This section serves as a testament to the continuous learning process inherent in the realm of technical analysis and trade execution, specifically within the dynamics of NAUKRI.

4. Continuous Learning Process for NAUKRI

Emphasizing the perpetual nature of learning within the context of NAUKRI's market behavior, I underscore the need for an adaptable and growth-oriented mindset. Trading NAUKRI is not just about executing transactions; it's a continuous journey of refinement and evolution tailored to the nuances of the stock.

5. Analyzing Post-Target Behavior for NAUKRI

Post-target analysis becomes a crucial component of the NAUKRI trade journey. I scrutinize NAUKRI's behavior after hitting the initial target, evaluating the feasibility of re-entry during a pullback or consolidation phase. This section underscores the importance of ongoing market analysis in shaping future strategies specific to NAUKRI.

6. Emphasizing Ongoing Market Analysis for NAUKRI

The blog concludes by emphasizing the significance of ongoing market analysis and the need to adapt strategies based on changing conditions, specifically within the dynamic environment of NAUKRI. Staying proactive and nimble is crucial for sustained success in navigating NAUKRI's ever-shifting landscape.

Conclusion:

In the final analysis, I summarize the key takeaways and learning opportunities specific to the NAUKRI trade journey. This bespoke exploration highlights the importance of adapting strategies, refining decision-making skills, and maintaining a balanced approach for long-term success within the unique context of trading NAUKRI. The trading journey with NAUKRI is a continuous evolution, and by embracing the nuances revealed through meticulous notes, traders can navigate the complexities of the stock market with confidence and acumen, tailored to the specific behaviors of NAUKRI.


If you're eager to delve deeper into the world of swing trading and receive real-time trade setups, join my Telegram channel by clicking on link : https://t.me/tradewithkavita 

Watch past webinars for more technical analysis and swing trading knowledge sharing https://www.youtube.com/@EXP_Invest 


Thank you for reading!


-Kavita Agrawal CMT CFA


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