Bank Nifty continued to edge higher for the fourth consecutive week and formed a on weekly time frame. The weekly close 22399 is slightly higher than the weekly open 22271. The size of the wicks (both upper and lower wick combined) is 7 times that of the body and, the length of the upper wick is 2.9 times that of the lower wick indicating a possible turnaround of the existing direction of price. The confirmation of turnaround comes only when price breaks below the weekly low.
On a daily time frame price formed a on Wednesday with higher compared to the previous day . With a we formed a expectation, but the expectation remained muted on Thursday with the formation of an . Price neither breaking the low or the high of the was the reason behind the muted expectation. The weekly close occurred with a strong bar with a close in lower one-third of the range indicating sellers in control. A large price bar body indicates strong bearishness with active participation. With a breakout setup we form a expectation. The expectation is validated only when price break below the low of the bar of Friday.
The current weekly decreased to 5.5 compared to the previous week of 6.7. The probable weekly returns is of 1243 points from the weekly close, with a measured move in increments of 260 points.
The key level of the existing trend is at 20926 and the critical level at 19507. The point of control of Bank Nifty Spot for the upcoming week is in the zone of 22561. Price staying above the point of control can find minor resistance in the zone of 22821 and major resistance in the zone of 23081. Price surpassing the major can further move towards the zone of 23341 and 23601. Price staying below the point of control can find minor support in the zone of 22301 and major support in the zone of 22402. Price breaking below the major can move lower towards the zone of 22041 and 21781.
All investments 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.
Point of Control: 22561
Resistance: 22821 | 23081 | 23341 | 23601
Support: 22301 | 22402 | 22041 | 21781
Think of Point of control as a zone, where you can find concentration of order flow in the market.The concentration in order flow is due to the sentiment of the collective psychology of market participants. And price moves with whichever crowd most desperately needs to act.
In a nutshell,
1.Price movement results, from a supply or demand imbalance
2.Changes in supply and demand occur as sentiment changes within the market participants.
3.Price therefore depends on the bullish or bearish sentiment of market participants.
4.The net sum of all individual trader decisions and actions, form the Net Order Flow.
5.When Net Order Flow is bullish (demand greater than supply), price will rise.
6.Price continues to rise until we run out of buyers at higher prices, or until the higher prices attract sellers in sufficient quantity to overcome demand.
7.When Net Order Flow is bearish (supply greater than demand), price will fall.
8.Price continues to fall until we run out of sellers at lower prices, or until the lower prices attract buyers in sufficient quantity to overcome supply.
So an individual should be aware of the point of control so that one can be in the direction of smart money flow, which increases the odds of the game of probability.
A. If you find a trading opportunity with a BULLISH TRADE SETUP above the point of control then your trading decisions should be orientated towards LONG positions.
B. If you find a trading opportunity with BEARISH TRADE SETUP below the point of control then your trading decisions should be orientated towards SHORT positions.
C.If you don’t find any trading opportunity near the point of control then it is always better to be on sidelines.
NOTE: One should not just initiate a long or a short position on price crossing above or below the point of control rather, one should wait for a LOW RISK HIGH PROBABILITY TRADE SETUP above or below in close proximity to the point of control.