Cse Trading Desk

Step 2: Technical Execution Analysis

Entry Timing Signals

Prioritize these for CSE:

1. Support/Resistance: CSE stocks respect round numbers and historical levels

   • Buy near support with confirmation (volume spike, bullish candle)
   • Sell/short near resistance on rejection

2. Moving Average Tests:

   • Entry on 20-SMA bounce in uptrend
   • Entry on 50-SMA test with RSI oversold
   • Avoid entries when price is far from any moving average (overextended)

3. Volume Confirmation:

   • Buy only when volume confirms the move (above 20-day average)
   • Be skeptical of price moves on low volume
   • CSE-specific: Morning session often sets the tone; afternoon can reverse

4. Momentum Indicators:

   • RSI divergence (price makes new low but RSI doesn't = reversal signal)
   • MACD crossover with histogram expansion
   • Stochastic in oversold zone with uptick

CSE-Specific Execution Tactics

• Accumulation strategy: For large positions in illiquid stocks, split into 3-5 tranches over multiple days
• VWAP targeting: Aim to buy below the volume-weighted average price
• Price limit awareness: CSE has daily price limits; don't chase at the limit
• Opening auction: The 9:30 AM opening can offer opportunities if overnight news moved sentiment
• Closing auction: 2:15-2:30 PM closing cross — some institutional orders come through here

Step 3: Trade Plan Template

For every trade, define:

Pre-Trade Checklist

• Market trend alignment (is the tide with you?)
• Technical entry signal identified
• Volume adequate for your position size
• Risk/reward ratio ≥ 2:1
• Stop-loss level defined BEFORE entering
• Position size within risk limits
• No conflicting news or events pending

Trade Specification

Step 4: Trade Types for CSE

Swing Trades (2-10 days)

Best suited for CSE given lower liquidity:

• Trade in the direction of the 20-day trend
• Enter on pullbacks to 20-SMA or 50-SMA
• Target 5-15% moves
• Stop-loss: Below the swing low

Position Trades (2-8 weeks)

For higher-conviction ideas:

• Based on fundamental catalyst + technical timing
• Enter in 2-3 tranches to average in
• Wider stops (below 50-SMA or key support)
• Target 15-30% moves

Breakout Trades

For stocks consolidating near resistance:

• Wait for volume breakout above resistance
• Entry on breakout candle close above resistance
• Stop-loss just below the breakout level
• Volume must be > 2x average to confirm

Mean Reversion

For established range-bound stocks:

• Buy at range support, sell at range resistance
• Use Bollinger Bands as dynamic range
• RSI < 30 at support = entry
• RSI > 70 at resistance = exit

Step 5: Trade Management

Once in a trade:

• Partial profits: Take 50% off at Target 1, trail stop on the rest
• Trail stop: Move stop to breakeven after Target 1 is hit
• Time stop: If trade hasn't moved in 2x the expected timeframe, re-evaluate
• News stop: Exit immediately if material negative news hits the stock

Important CSE Trading Notes

• CSE market hours: 9:30 AM - 2:30 PM Sri Lanka time (GMT+5:30)
• Pre-open: 9:00 AM - 9:30 AM (order entry but no matching)
• T+2 settlement: You need funds 2 days after buying
• No short selling for retail investors
• Minimum tick size varies by price level
• Brokerage commission: Typically 1-1.5% + taxes
• Transaction costs matter — factor in round-trip costs before trading

Examples

Example 1: Entry Timing

User: "When should I buy JKH?"

1. Analyze JKH technicals — identify key support levels
2. Check if broad market supports the trade
3. Define specific entry zone, stop-loss, and targets
4. Recommend execution strategy (single order vs tranches)

Example 2: Breakout Watch

User: "COMB is near its 52-week high, should I buy?"

1. Check if this is a genuine breakout or false break
2. Analyze volume — is it confirming the move?
3. Calculate risk/reward from current level
4. Advise: wait for confirmed close above resistance, or buy the pullback

Example 3: Exit Strategy

User: "I'm up 20% on SAMP, should I sell?"

1. Check current technical position — is momentum still positive?
2. Is 20% a reasonable target or is there more upside?
3. Suggest partial profit-taking and trailing stop strategy
4. Define the stop level that would trigger full exit