In the monthly chart, on the left-hand side, it can be observed that 2017 highs acted as a strong resistance. But once this level was taken out, it started acting as a support in 2022. Holding the very basic idea that a resistance once taken out, start acting as a support. You would observe this concept several times on this chart.
On the right-hand side, we can see a shift in structure from LL-LH to HL-HH formation near the above-mentioned levels (2017 highs). It was analyzed and explained in the following idea-
The resistance area of 25200 was broken out in March2023 and later tested twice in June and September2023. We can see a range creation between 31200 and 25200. The 25200 resistance now acted as a support and the range broke out in October2023.
It continued higher with a small area of consolidation in-between November, which finally broke out this month (December).
Currently we are facing a pullback from near 44700 to 40132 on this chart. The volume was high during this pullback but there is no follow through. This is indicating that this pullback could be just a shakeout.
⚡I would discuss three scenarios here for different type of traders:
-Overtly Bullish
-Moderately bullish
-Cautiously bullish
🚀Overtly Bullish- This is the most probable scenario at this point and is suitable for short term traders. Market will resume higher after the shakeout. There is a wholesale entry near 40000-40100 zone with stop below this zone. Targets could be 44500/48200 for short term.
🚀Moderately bullish- As per this scenario, we have stretched too far and expecting further pullback. This scenario is suitable for those who have intermediate term perspective. In this case 38000 (previous resistance) may act as support, so a bounce play could be an option from there. The stop would be below 38000 and target 44500 or higher.
🚀Cautiously bullish- This scenario is for those who are looking for longer term opportunities in the market. They would ignore entries near the higher prices and wait for deeper corrections. For them expect a break till 35000/33400 could be best where more buyers would show up in the October2023 breakout zone.
Which category do you belong to?
Write in the đź’¬section below.
Do boost🚀the idea if you think it was informative.
Regards.
Disclaimer: The levels discussed are for educational purpose only and not a trading or investment advice.
On the right-hand side, we can see a shift in structure from LL-LH to HL-HH formation near the above-mentioned levels (2017 highs). It was analyzed and explained in the following idea-
The resistance area of 25200 was broken out in March2023 and later tested twice in June and September2023. We can see a range creation between 31200 and 25200. The 25200 resistance now acted as a support and the range broke out in October2023.
It continued higher with a small area of consolidation in-between November, which finally broke out this month (December).
Currently we are facing a pullback from near 44700 to 40132 on this chart. The volume was high during this pullback but there is no follow through. This is indicating that this pullback could be just a shakeout.
⚡I would discuss three scenarios here for different type of traders:
-Overtly Bullish
-Moderately bullish
-Cautiously bullish
🚀Overtly Bullish- This is the most probable scenario at this point and is suitable for short term traders. Market will resume higher after the shakeout. There is a wholesale entry near 40000-40100 zone with stop below this zone. Targets could be 44500/48200 for short term.
🚀Moderately bullish- As per this scenario, we have stretched too far and expecting further pullback. This scenario is suitable for those who have intermediate term perspective. In this case 38000 (previous resistance) may act as support, so a bounce play could be an option from there. The stop would be below 38000 and target 44500 or higher.
🚀Cautiously bullish- This scenario is for those who are looking for longer term opportunities in the market. They would ignore entries near the higher prices and wait for deeper corrections. For them expect a break till 35000/33400 could be best where more buyers would show up in the October2023 breakout zone.
Which category do you belong to?
Write in the đź’¬section below.
Do boost🚀the idea if you think it was informative.
Regards.
Disclaimer: The levels discussed are for educational purpose only and not a trading or investment advice.
Comment:
As the price is approaching the support level, there are several ways in which one can look for trading opportunities.
-Break of downtrend channel
-Sustaining price above 41700
-Signs of strength (Price+Volume) in 40600 to 40200 zone
The entry is all about personal style and risk appetite. However, the real challenge is to know, when you should stick to your plan and when to be flexible.
-Break of downtrend channel
-Sustaining price above 41700
-Signs of strength (Price+Volume) in 40600 to 40200 zone
The entry is all about personal style and risk appetite. However, the real challenge is to know, when you should stick to your plan and when to be flexible.
Comment:
After a nice bounce from Support, the price has contained in a range -40289/43813. This is the entire range of the wide bar made on 11thDec.
A failure to break above resistance will push it back into the range AND also a failure to break below support will bring it back into the range (as we saw last time).
This may repeat as long as it doesn't break decisively on either side.
A failure to break above resistance will push it back into the range AND also a failure to break below support will bring it back into the range (as we saw last time).
This may repeat as long as it doesn't break decisively on either side.
Comment:
Consolidations are seductive in nature. You would often notice breakout like situation as the price peeks above the consolidation range, attracts buyers and then reverts back inside the range. Similarly, it would peek below the range, attract sellers and then reverts back inside the range.
Psychologically, it's too difficult for many traders to realize the true nature of consolidations and do the opposite- look for selling opportunities near resistance and buying near support, easier said than done.
If you carefully observe the 43400-44300 range is at the upper end of a larger range- around 40200 to 43500.
The question arises here is that is it absorption or distribution?
Can you answer? Actually, it's a difficult one to answer unless price slips out on either side. Yep, its correct not to anticipate and trade what you see. Let the price hint what it's going to do next and then react.
Psychologically, it's too difficult for many traders to realize the true nature of consolidations and do the opposite- look for selling opportunities near resistance and buying near support, easier said than done.
If you carefully observe the 43400-44300 range is at the upper end of a larger range- around 40200 to 43500.
The question arises here is that is it absorption or distribution?
Can you answer? Actually, it's a difficult one to answer unless price slips out on either side. Yep, its correct not to anticipate and trade what you see. Let the price hint what it's going to do next and then react.
Comment:
Broke out of Resistance for 48Ks
JJ Singh
Trader/Investor
Moderator, TradingView
🚀Join t.me/jjsingh_2020 ,
A Free Education channel
🚀Tweet at twitter.com/JaySingh_2020
Trader/Investor
Moderator, TradingView
🚀Join t.me/jjsingh_2020 ,
A Free Education channel
🚀Tweet at twitter.com/JaySingh_2020
Two trade setups near 40200 support-
A- Market holds support > gives a buying opportunity > resumes higher
B- Market breaks support > gives a sell opportunity > resumes lower