The "What" vs "Why" Series - (1) TRILTransformers & Rectifiers Ltd: TRIL
When any Stock faces a Sudden Crash or a Sudden Rise - many Retail Investors go Ga-Ga over the question "Why why why did it happen ??" - especially on a crash. Their worry is on whether to Hold or Exit their holdings
Such violent moves typically are caused due to some NEWS. Obviously we all have a portfolio of atleast 20+ diversified stocks and it's not humanly possible to keep Real-time track of every News around the counter. So Why do we really worry about the "Why" ???
The Real Question to ask is "What do we do now" - and the answer is
1. Refer the Support and Resistance levels on the chart
2. Check for any potential Breakdown of Structures like Parallel Channel, Flag Breakdown etc...
3. Most importantly check the Higher Timeframes Weekly / Monthly
Manytimes a Pattern Breakdown on Daily just forms a Wick (SL Hunting) on Weekly or Monthly - Fooling us
Let's see with an example
TRIL - Weekly Chart:
1. Multi year Parallel Channel - Upward
2. Repeating "Cup" patterns
During Late July - there was a News from one of the Clients of TRIL accusing the company of defrauding them of marking an order as complete but consignment was not received. The stock crashed 20% same day - even before the TRIL management could respond. The crash continued from 110 to 80 for 2-3 sessions.
Think again - it's just an accusation - yet to be responded, yet to be proved. But due to Media Hype retail investors sold in Panic - many in loss. Does it really make sense ???
From a Pattern wise - "Repeating Cups".
1. Whether the Cup forms slowly or it hits the Bottom of the Cup is hit in 2-3 days - does it really matter ?
2. 6 months down the line - when someone is analysing the chart - would you see a Repeating Cup or do you remember why it fell to bottom of Cup everytime ???
3. THINK AGAIN - we only see a Cup irrespective of the reason. And when bottom of Cup is reached it rises almost 2x higher. Thats what chart shows.
I had position at 100, when it reaxhed 78 and started rising I averaged at 82 and had conviction to hold and made amazing gains in just couple of months to 170 levels - all 3 targets given earlier were hit 🎯💯
The reason for my conviction is "accusation is not proven" and "pattern repetitions are not broken" + "support levels intact"
This is why our motto is "Learn to Ride the Tide - Irrespective of its Side"
Forget "Why things happened"...Focus on "What to do"
- Team Stocks-n-Trends
