Reliance Volume Profile Trade SetupMar 23, 2023
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Volume Profile is an important Technical analysis tool that can be used to identify if there is any major activity happening in the stock by big players or institutional traders.
This is simple but powerful method that can enhance the accuracy of trading giving all together a different insight and conviction for taking a trade.
There are different shapes to Volume profile named “D Shaped”, “P Shaped”, “b Shaped”
Below is an example of a stock showing “D Shape” Volume profile on Reliance Industries
Reliance Daily chart:
Reliance Hourly chart:
Reliance Industries Volume profile along with Elliott wave counts is shown in the above chart.
We can see a “D shaped” profile that indicates balanced. D-shaped profiles occur when there is a temporary balance in a market. However as the highest profile or Point of Control is near the lower end of D shaped profile it indicates distribution by big players near 2390 levels
The level with the highest volume profile is shown with a red line. This level is 2390 on daily chart and 2330 on hourly chart. There is price acceptance below this profile zone and 2330 is going to be major hurdle for the stock.
Elliott wave – As shown on hourly chart, the stock looks to have completed wave (c) lower and is now in temporary pullback which will not cross 2330 levels.
Short term traders can further reduce time frame to see intraday players activity and form strategy accordingly.
Thus Reliance Industries volume profile with Elliott wave is suggesting we are in short term upside pullback that can halt prices to 2300 – 2330 levels. Options strategy can be formed basis of this important price action areas.
Basis of this simple concept of volume profile one can make out zone of strong support and resistance where the volume profile is highest. However, one can further combine this along with Ichimoku cloud and other intraday techniques to enhance the conviction for trading.
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