It is difficult to predict which real life volcano on earth will erupt and when!
But it is easier to predict the volcano eruptions in stock markets.
Some volcanos are seasonsal like:-
1) Railway company stocks before the railway budget!
2) Airlines stocks before business travel season (typically before Diwali to New year)...
3) Hotel stocks just before the festival and tourist season...
4) Media stocks just before major events requiring big ad expenditure like elections or cricket world cup etc...
5) Public sector stocks before the budget...
6) Consumer Durable stocks before the festival season...
7) Fertiliser and Irrigation-related stocks before Rabi and Kharif season and before the budget...
8) Auto companies' stocks just before their peak season...
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But some are non-seasonal positional volcanos.
If you look at the graphs of the stocks of these companies you will find extraordinary narrow range movement of the price for an uncomfortably long period of time.
This is against their nature as exhibited in the past.
This is the clear sign of an impending volcano eruption!
The best example is Jet Airways which was a sleeping Volcano from mid-June'09 to mid-Sep'09.
And when it erupted in mid-Sep'09 onwards, it went from 260 to 600 in just next 50 sessions!
Real volcanos erupt only upside, stock volcanos can erupt on either side.
So, a big chance to go long or short will definitely come after the long consolidation. So be on the lookout!
The best signal is higher low (signal to go long) or lower high (signal to go short)!
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