WD Gann laid down some basic rules to be followed.

WD Gann laid down some basic rules to be followed.

1. Friday Weekly High – Bullish Next Week

If the high price for the entire week is achieved on Friday, expect higher prices next week.

2. Friday Weekly Low – Bearish Next Week

If the low price for the entire week is achieved on Friday, expect a much lower price next week.

3.Tuesday Lows – Uptrend Market

In a highly up trending market weekly low is achieved on Tuesday.

4. Wednesday Highs—Downtrend Signal

If the market is in a strong downtrend (if the main trend is down), the weekly highs are generally achieved on Wednesday.

5. 4-Week High Breakout – Bullish Indication

When the price crosses the high of the last four weeks, it’s an advance indication of more higher prices.

6. 4-Week Low Breakdown – Bearish Indication

When the price breaches the low of the last four weeks, it’s an advance indication of more lower prices.

7. 30 DMA Breakdown – Trend Reversal Signal

In an up trending market, if the prices break the 30 DMA & remain below it at least for 2 consecutive days, it tells us of a much greater correction. (vice-versa)

8. 5:3 Rise-Correction – Probable Pullback

If the market rises for 5 consecutive days, there is a high probability that correction will be lasting for 3 days. (Ratio is 5:3)

9. 100% Rise Resistance – Strong Price Barrier

When the price starts rising from a particular level, Rs.100 or 100% rise whichever is earlier becomes a strong resistance.

10. 3-Day High Break – Fourth-Day Surge

When the price crosses the high of the last 3 days, it tells us about much higher prices on the 4th day. (Traders can buy it on the 4th day and place an SL order Rs. 3 below the last 3 days’ high) (vice-versa)

11. Deeper Correction – Trend Change Warning

If subsequent correction is greater than the previous correction, both in terms of price & time magnitude, this is an advanced indication that the trend is changing.

12. 50% Sell Zone – Critical Support Level

50% of the last highest selling Price is the strong support area. Any stock that is trading below this 50% level is not that useful for investment.

13. 9:5 Rise-Correction – Extended Pullback

If a price is rising for 9 consecutive day’s at a stretch, then there is a high probability of a correction for 5 consecutive days. (Ratio is 9:5)

14. Monthly Bottom Pattern – Mid-Term Opportunity

Don’t ignore a Double Bottom & Triple Bottom signal on a monthly chart, after a minimum gap of 6 months. ( advance indication for mid-term investment)

15. Monthly Top Pattern – Cautionary Signal

Don’t ignore a Double Top & Triple Top signal on a monthly chart, after a minimum gap of 6 months.  (Not the right place for investment/entry, the price may fall)

16. Volume Spike Signal – Trend Reversal Hint

When the price is in a choppy phase, or in a consolidation phase, if a sudden volume spike is found there, it’s an advance indication that trend is likely to change.

17. Quarterly Breakout – Trend Reversal Alert

In a quarterly time frame, when a particular stock crosses the high or low of the last quarter (in the quarterly chart), it should be considered as an early indication that the underlying trend is trying to reverse.