"Step Down Bluff" Day Trading Technique

1) Select any High volume stock (or Nifty Futures)

2) Which makes a sharp (not too small fall) pencil heel v-shaped pointed low anytime before 11.30am but not before 9.25am (Lets call this point L)

3) And starts to rise after making that sharp pointed low.

4) This stock (or Nifty Futures, as the case may be) will always retrace to atleast that lowest point L

5) So you can short that stock at any "substantially" high point. you can try this out on any stock on intraday chart in back date (www.google.com/finance is good chart site) before actually applying this. (Pl read the detailed explanation / discussion below to understand the finer points of the technique).

* This point L has to be substantially lower than the day's opening.

* About entry point = Enter in steps after (say) every 0.3%.

I have noticed that (as an extension of this technique) if the LOWEST sharp pencil heel base/foot is formed after 11:30am (later the better), it is a reasonably safe point to go intraday long.

Why this technique works =

1)If there is a SHARP & STRONG selling pressure in the early part of the trading day AND the stock starts to rise on a single pencil heel base, the rally is just a technical unsustainable rally.

This rally is basically due to many many traders (rather prematurely) jumping in to "buy at dips/support". Seeing these early buyers, others jump in too....later the rally becomes unsustainable and hence a sell-off.

In his technique, that stock should be avoided which is very strong in those days.
The reason is simple = these stocks might have seen strong and sharp morning sell-off due to weakness in the index but are intrinsically strong enough . Their morning sell-off is, therefore, unsustainable and hence no surprise if these fly away even on a single pencil heel v-shaped foot. Other not-so-strong and weak stocks WILL follow this technique.

One of my friend's sister is pilot with Kingfisher. He said = my sister tells me that the most crucial time for a pilot is "a few minutes of take-off and a few minutes of landing". These are CRITICAL. Rest is a simple routine affair.

Similarly, in this technique, the most crucial and decisive part is at the "take-off".

So, Check...

1)whether there is a sharp and strong sell selling pressure in the early part of the trading day?.....

2)whether it is well within the time boundaries (otherwise the false rise rally is not that false).....

3)whether the stock chosen has intrinsic strength....

4)whether it is a clear, well defined single pencil-heel v-shaped foot base?....

Unlike aeroplanes, in this technique (while shorting), crash landing is desirable and highly profitable...and welcome....so only take-off is critical....not difficult, though.

Also, unlike aeroplane, in this technique u enter the plane after the takeoff, at a "sufficiently" high (preferably highest point). The only thing to be taken care of is to enter only in the RIGHT plane which has taken-off AS PER THE RULES of the technique.