EMA Shakeout Detector

EMA Shakeout & Reclaim Zones

Description:
This Pine Script helps traders quickly identify potential shakeout entries based on price action and volume dynamics. Shakeouts often signal strong accumulation, where institutions drive the stock below a key moving average before reclaiming it, creating an opportunity for traders to enter at favorable prices.

How It Works:
1. Volume Surge Filtering:
a. Computes the 51-day Simple Moving Average (SMA) of volume.
b. Identifies days where volume surged 2x above the 51-day average.
c. Filters stocks that had at least two such high-volume days in the last 21 trading days (configurable).

2. Stock Selection Criteria:
a. The stock must be within 25% of its 52-week high.
b. It should have rallied at least 30% from its 52-week low.

Shakeout Conditions:
1. The stock must be trading above the 51-day EMA before the shakeout.
2. A sudden price drop of more than 10% occurs, pushing the stock below the 51-day EMA.
3. A key index (e.g., Nifty 50, S&P 500) must be trading above its 10-day EMA, ensuring overall market strength.

Visualization:
Shakeout zones are highlighted in blue, making it easier to spot potential accumulation areas and study price & volume action in more detail.

This script is ideal for traders looking to identify institutional shakeouts and gain an edge by recognizing high-probability reversal setups.