Price Action Analysis
Price recorded a new high at 23212 after the previous week down bar and finally managed to close at 22662 in the form of an up bar. An up bar after a down bar formed a significant weekly higher swing low at 21027. The current week price bar structure, an up bar is indeed a bullish bar in nature but, with a close in the middle one third of the range. The size of the body is lesser than that of the wick (both upper and lower wick combined). The size of the upper wick is 4.6 times of the lower wick indicating a possible turnaround of the existing direction of price. The confirmation of the turnaround comes only when price breaks the low of the current bullish bar at 22187. The weekly buying pressure (474) is marginally less than weekly selling pressure (549). Even though the weekly bar is an up bar with a higher low and higher high, the characteristics of close, body, wicks, buying and selling pressure indicate weak bullishness which is due to lack of strength as result of reduced commitment from buyers.
On Monday price witnessed a gap up opening at 22307. A second gap up occurred on Tuesday. On Wednesday price again opened with a visible gap up and recorded a high 23212 and formed an open close reversal price bar with the close in the middle one third of the range indicating indecision. On Thursday price neither broke the high nor the low of the open close reversal price bar. With the high and low of the prior day intact price formed an inside bar. On Friday price broke the low of the mother bar and formed a trigger bar for the inside bar. With a trigger bar in place price formed a swing high at 23212. The trigger bar is indeed a bearish bar but with the close in the middle one third of the range indicating indecision. The most important aspect to observe is that price managed to break the low of the mother bar but price closed within the range of the mother bar. With a bearish trigger to the inside bar we form a bearish expectation keeping in mind the sentiment of the trigger bar. The bearish expectation will be confirmed only when price breaks the low of trigger bar at 22417 and a realistic price zone of 22369. The current weekly volatility decreased to 4 compared to the previous weekly volatility of 5.5. The probable weekly returns is 928 points from the weekly close, with a measured move in increments of 256 points.
Trade Plan
The key level of the existing trend is at 21027 and the critical level at 20926. The point of control of Bank Nifty spot for the upcoming week is in the zone of 22700. Price staying above the point of control can find minor resistance in the zone of 22956 and major resistance in the zone of 23212. Price surpassing the major resistance zone can further move towards the zone of 23468 and 23724.
Price below the point of control at 22700 can find minor support in the zone of 22443 and major support in the zone of 22187. Price breaking below the major support zone can move lower towards the zone of 21931 and 21676.
Disclaimer
All investment ideas published are for educational purpose only. All investments and trading decisions involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, or individual’s trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
Price recorded a new high at 23212 after the previous week down bar and finally managed to close at 22662 in the form of an up bar. An up bar after a down bar formed a significant weekly higher swing low at 21027. The current week price bar structure, an up bar is indeed a bullish bar in nature but, with a close in the middle one third of the range. The size of the body is lesser than that of the wick (both upper and lower wick combined). The size of the upper wick is 4.6 times of the lower wick indicating a possible turnaround of the existing direction of price. The confirmation of the turnaround comes only when price breaks the low of the current bullish bar at 22187. The weekly buying pressure (474) is marginally less than weekly selling pressure (549). Even though the weekly bar is an up bar with a higher low and higher high, the characteristics of close, body, wicks, buying and selling pressure indicate weak bullishness which is due to lack of strength as result of reduced commitment from buyers.
On Monday price witnessed a gap up opening at 22307. A second gap up occurred on Tuesday. On Wednesday price again opened with a visible gap up and recorded a high 23212 and formed an open close reversal price bar with the close in the middle one third of the range indicating indecision. On Thursday price neither broke the high nor the low of the open close reversal price bar. With the high and low of the prior day intact price formed an inside bar. On Friday price broke the low of the mother bar and formed a trigger bar for the inside bar. With a trigger bar in place price formed a swing high at 23212. The trigger bar is indeed a bearish bar but with the close in the middle one third of the range indicating indecision. The most important aspect to observe is that price managed to break the low of the mother bar but price closed within the range of the mother bar. With a bearish trigger to the inside bar we form a bearish expectation keeping in mind the sentiment of the trigger bar. The bearish expectation will be confirmed only when price breaks the low of trigger bar at 22417 and a realistic price zone of 22369. The current weekly volatility decreased to 4 compared to the previous weekly volatility of 5.5. The probable weekly returns is 928 points from the weekly close, with a measured move in increments of 256 points.
Trade Plan
The key level of the existing trend is at 21027 and the critical level at 20926. The point of control of Bank Nifty spot for the upcoming week is in the zone of 22700. Price staying above the point of control can find minor resistance in the zone of 22956 and major resistance in the zone of 23212. Price surpassing the major resistance zone can further move towards the zone of 23468 and 23724.
Price below the point of control at 22700 can find minor support in the zone of 22443 and major support in the zone of 22187. Price breaking below the major support zone can move lower towards the zone of 21931 and 21676.
Disclaimer
All investment ideas published are for educational purpose only. All investments and trading decisions involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, or individual’s trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.