Friday, 9 November 2012

Will Aban Offshore take a support??

As you would notice, it is right at the channel support.  Now question is would it take support or go down more?  Well, i am not here to predict.  Technical analysis does not believe in predicting.  It believes in probability.

There is a high probability that it would take support here.  It has twice taken a support on this channel line in the past.  So it is likely to repeat the history the third time.  Secondly, look at the volume.  It is falling on less volume compared to when it was going up. Third, RSI is at extremely oversold level.  So all things put together, there is a high likelihood of taking the support.

Now the question is what if it does not???  Answer is we should never bother.  If there is a trade setup, we should take it.  Fine if it goes in favor.  Else SL will hit.


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