Sucker Rally generally refers to temporary rise in stock price or whole market, just to attract small traders, speculators. We can also term it as Dead cat bounce, Bear market rally ( This information applies to Small cap and Mid-cap category stocks as Both category is in bear grip). Bear Grip means when a stock/Index falls 20% from highest point.
Dictionary Meaning of Sucker as one “who is easily deceived” or “duped “
Many new traders or random Intraday players are trying to catch small/mid-caps these days, but all stocks will not sustain higher levels, once this sucker rally is over then all will fall subsequently. You have to filter out some good fundamentals stocks from Mid-cap list, so that they can sustain higher level and continue to hit new high.
Also note that this Surprise rally is just due to hope of BJP Govt. forming again. If there is slight mismatch of votes of BJP, then BE READY for a High volatile Free Fall. ( Finger crossed).
Point to Remember: 50% of Sucker Rally also confirms Bottoming out of stocks/Index from Bear Grip. But here we have to wait for actual result of Election, Because all stocks rallying on hope of BJP only.
Better to Search for good names and avoid taking position in garbage stocks, Garbage will trap you always.
Manipulated Garbage Stocks : Link Fundamental Garbage stocks : Link How to check Garbage shares : Link
Sucker Rally generally driven by FII (Financial Institutional Investor), FII are first to take advantage of this kind of situation, First they poured Money in Chinese Market in Nov 18-Jan 19 and now in Indian Market Feb 19-Apr 19.
Be aware of what you are doing in market, Because with every entry there should be an Exit route also, Respect your stop loss Because you may get trap in rallying shares. Take position according to risk, don’t check what other’s are buying.
In this Phase If you have Technical knowledge then You can easily play this rally, Because many share will show you Breakout from lower levels, It’s upto you how to check a perfect Breakout. Many conditions are there to check a perfect Breakout, I have my own conditions and I Buy according to it, Recently We bought Many good share and Booked 4-10% profit in some good shares.( Here We stands for all telegram members who following me Telegram Equity stock channel : Link)
From Bottom Use these Technical Patterns to play sucker Rally.
- Breakout From Lower Low – Lower High.
- Inverse Head & Shoulder.
- Double Bottom.
- Symmetrical Triangle.
- Rounded Bottom
- Candle reversal Pattern on Weekly/Monthly charts.
Above Listed Pattern are powerful Bottom Reversal to take trade. Here we are discussing only about Short term trades, which will be there for only 5-8 weeks, so strict Stop loss should be there. Like in last 2-3 weeks We traded 16 stocks on Bottom Reversal Patterns
From Top use these Technical Pattern ( Top Continuation Pattern).
- Cup & Handle
- Ascending Triangle Breakout
You can Take trade in Cup & handle without any doubt, Like in Reliance, PVR, Asian paints, Pidilite all showing good pattern of Cup & handle. ( Take Trade according to your risk, no need to put any heavy Amount in one single share).
If No Proper Trend in stock then use these pattern to play sucker Rally.
- Bullish Flag.
- Bullish Pennant.
- Rectangle Pattern.
Recently We bought some good stocks from all these Patterns, You can check all details in this Excel File.
EXCEL SHEET : Link For Regular Updates You can Join Telegram Channel : Link
Technical Pattern will work only if you trade in your limits. If you exceed your limit of Risk then No one can save you. (Greed & Fear – Two evils of Trading).
