Apoorv Averoy, the B.Tech student at Thapar Institute of Engineering and Technology, is a trader with deceptive looks. Prima facie, you can be mistaken with his teenage appearance that looks like a television star. But that’s where the similarity ends. His command over chart patterns sets him apart in a different league altogether. Once he starts explaining charts, you have no option but to listen to him with rapt attention. Unlike other chart readers, he specializes in finding hidden patterns. And apart from this, he also runs a mentoring program for fellow traders that you can check at the Hashtag Hammer website. That’s caught my imagination, and I thought to interview him. Here is the first part of the series:
How did your trading journey start?
Like any college kid, I had a travel trip with friends. However, I was not aware that it would be that expensive. The money I had with me got exhausted. I called my Father and asked for some extra cash, and he responded that you had crossed the limit. You should go ahead with your portfolio. I debited some money from it. However, I was not sure how this money came from. Initially, I did the financial analysis and bought Reliance shares.
Then, I asked him about how to do financial analysis. Though he was not a good fan of fundamental analysis, he taught me a few indicator-based technical analysis concepts. He told me to also get along with Fundamental analysis.
Later, I created a portfolio of 70,000, and it was only going up. Then, correction started, and I lost badly. That’s where my journey began, and I began to think why this was happening. I started reading the price action part of the Technical analysis.
What prompted you to get into hidden patterns out of nowhere?
Here I’d say I am lucky that my Father Introduced me to the markets. On the other hand, My mother, also a Technical analyst and a great cook, helped me learn price action analysis and psychology. Both have been in the market for the last 20 years. My mother told me I should not be specific with my analysis and go the extra mile if needed. That is when the sleepless nights prevailed. Hidden patterns came along.
I want to clarify that I prefer not to name patterns though I trade patterns. It’s a particular market structure that I am trading. You may be calling it Head and Shoulder pattern, cup and handle, or symmetrical pattern.
It is essential to understand why the inverted head & shoulder pattern is much more important than the head & shoulder pattern. The market makes a Low; then it comes to a Support area. Let’s understand it from the chart of Indusind Bank.
The stock closes right here, and it’s not going above this area. What is preventing it go above this area? Then it falls back, gets Support in an area, and then goes up, again the same Resistance, then similarly goes down.
Again, there is a sharp recovery in the price, and it goes up to the earlier Support zone, which is now the new Resistance zone. It then eventually breaks above the neckline. I see that the sharp fall was a trap to shake out weak traders in the market. I would say that the accuracy of Inverted Head & Shoulder is perfect even in the bear market, and in the bull market, it’s top-notch.
Which kind of trader are you?
It depends on the atmosphere. When Nifty was making bottom after Corona, I was an investor. When it crossed 12,600, I became a Swing trader. Now at this level, I’m a short-term, intraday, and options trader. As I know, the market will either remain in a range or give some correction for sure. Only after crossing this level, it will start going up. Can I afford to be a trader at the encircled zone? No, not at all. There was massive volatility in this area.
As it is clear that Nifty 50 has made an intermediate top, where do you see going it now?
In the monthly chart, as you can see in the below image. In Feb, Nifty made a Mother bar with two inside bars. The chances of breaking down this area and going way down to 12,600 are significantly less. However, a good and healthy correction is much anticipated and is the need of the hour. Also, this zone is falling near the Fibonacci level. Therefore, I don’t see Nifty breaking this zone and going below the 13000 Levels in any condition.
The area closed in the rectangular box as shown in the above image in the yellow colour is 1.61 Fib level. Therefore, the 12600 level in Nifty will be too farfetched in this kind of bull run we have seen. My anticipation for the correction will be between 16000 to 15500 levels at max for the current market sentiments.
When Nifty Falls to this level, which will be the sectors to avoid.?
Nifty IT is one sector that may not give as much return. If you see CNXIT daily chart, it generally remains in consolidation for 800+ days and then moves between 50-100 per cent. That move has already come, and that’s why I believe Nifty IT may remain in consolidation for a long time if the past behaviour is considered.
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