Skip to main content

Can Price Symmetry Help Bulls to Get Back on Track?

A simple yet powerful tool that I use every day in my trading. It’s called symmetry. Symmetry in market means equality when comparing swing in same direction. This technique helps me to project probable target or reversal point on chart. In February after budget session NIFTY index took a dip of 1219.65 points from top of 11171.55 to low of 9951.90. This time nifty has been in a nice down trend from 5 weeks and it has headed a low of 10547.25 in today’s session. If we subtract 1219.65 points from recent top of 11760.20 then areas of 11540.55 are the probable support as per price symmetry.
However areas of 10540.55 are probable support areas and reversal can’t be expected exactly from that same level but it can be used as potential support area. On this chart I have drawn a horizontal line which is connecting multiple highs and lows which is also a significant area and rising trend line and horizontal line both are intersecting near 10460 zones which is also a crucial point to watch out.
However, price has been staying below 200 days SMA on daily chart which is almost equal to 40 days SMA on weekly chart showing bearish trigger but to confirm a bearish trigger of MA cross we still need 2 or more week’s stability below this SMA line to confirm change in longer term trend. Price had entered below 40 weeks SMA in November 2016 and March 2018 but no follow up selling occurred below those levels and market rebounded even after entering below this SMA.
RSI in a well-established uptrend works best with new concept which uses 80 and 40 as reference lines (overbought/oversold) for uptrend and 20 and 60 for down trend. In an uptrend reading is considered overbought when RSI is above 80 and considered oversold when it is below 40. As per these facts now RSI is at 39.76 which is also showing oversold reading and a recovery can be expected if bulls manages to protect 10450-10400 zones.
Based on charts and explanations above we can simply assume that a short lived bounce up to 35% to 50% of current bearish move can occur if 10450- 10400 zones remain intact. If bulls fail to claim their presence near these areas then 10000-9700 on the down side can be expected. Whereas recovery from 10500-10400 zones might bring 10910-11100 on cards. Areas of 11100 will still remain challenging.

#NIFTY, #Sensex, #BSE, #NSE, #StockMarket #ShareMarket, #Stock, #INDEX #TechnicalAnalysis, #MarketTrend
Labels:

Comments

Post a Comment

Popular posts from this blog

LIC Housing Finance; time for bulls?

  LIC HOUSING FINANCE settled at 321.90 up by 5.78% on Tuesday. Stock had been staying in a consolidation phase that took shape of an ascending triangle and in today’s session it broke through the resistance line of this triangle consolidation and settled well above key resistance of 312 suggesting dominance of bulls. Stock has been staying above its 9 days SMA on daily chart keeping a short-term bullish trend in picture. Stochastic is now approaching overbought territory along with bullish cross above its signal line suggesting a strong bullish momentum. MACD has been staying in positive territory and now its parting upward from its signal line suggesting development of fresh bullish momentum. Direction and momentum are two important components for any chart to anticipate future price movement and current trend and momentum on chart provided above is suggesting bullishness. Breakout of triangle pattern can be used to determine potential destination for current move and if th...
Post a Comment
Read more

Will Exhaustion Gap Halt the Down Trend in Nifty?

In this video we have explained what NIFTY is likely to do in next few sessions. 
Post a Comment
Read more

Nifty Options Weekly Expiry; MAX PAIN stands at 13400

#NIFTY #INDEX currently trading at 13438, down by 90 from previous close. Today index has opened gap down and taken out the low placed yesterday at 13449 triggering primary weakness in market for the day. Immediate support is now placed at 13390, retest to this level can’t be ruled out but stability below 13390 will result in to further weakness and then attempt towards 13350-13310 zones can’t be ruled out. Key support will be at 13300 and further stability below that level will bring more weakness. Resistance is now placed at day high which stands at 13488, any sustained move (Less likely) above that level will bring some relief to bulls and then attempt towards 13540-13590 can be seen.  On #option_chain heavy #call_writing is being done at 13500-13600 strikes where as short covering is visible in 13450 and 13500 puts whereas longs build up seen in 13400 puts with high volume. Based on current #OI position level of #option_pain stands at 13400 thus based on current data at 10:52AM...
Post a Comment
Read more