CNX PSUBANK:Time Cycle analysis and possible trade setup
psu bank index is following 55 days cycle meaning every 55 day we get a pivot low.so far we havent seen a lower low on psu bank index as compare to bank nifty or nifty.current 55 day cycle is ending on 31st may meaning around may end we can expect psu bank index to form important pivot low.
adding moon phases to this cycle we can get to know the harmonic of the 55 day cycle.here it seems like post every full moon we are seeing either a significant rally or a consolidation meaning prior trend either reverses or takes a pause after a full moon.we have a full moon on 16th may indicating current selling momentum can decrease and we can see some sort of consolidation or a small rally.
we are also seeing index at previous support(shown in blue line),although breached on 12th may,we haven't seen a follow through meaning we havent seen a lower low in yesterdays trading session.now if on monday 16th may,we get a close above friday's high then we can assume a temporary bottom has been formed and selling would halt.
on a larger scale it seems like psubank index is forming head and shoulder top pattern neckline of which is breached at 2430.
scenario-1: for long trade
as price has breached support of 2420-30 with most of the momentum indicators showing over sold reading and monday being a full moon day,i am expecting at least current selling momentum/intensity to decrease and form a short term base(4-5 days) hence ideally one should go long if we get a close above fridays high(2500) with fridays low as initial stop-loss(2385),if trade works in favour then one should trail stop-loss as per one's risk apetite every day,as 55 day cycle is still in sell mode,i am not expecting major bottom to form before 31st may or rather a bottom formed around 31st may would be more significant.
scenario-2: for short trade
if stop-loss of scenario 1 is triggered then one should go short aggressively.i will update entry exit levels for short trade.
this index is not tradeble but this analysis can be used as a reference for trading in psu banking stocks.check the chart's of psubank which resembles index's price movement for trading.
in recent times due to intermediate trend being down,i have observed bullish trade setup's are not working hence one can even avoid taking long trade inspite of trade setup criteria being fulfilled by price just to avoid trading against the trend.
trade setup logic
1)use of reversal candle
2)price action support
3)moon phase
4)time cycle
5)pivot low
disclaimer:analysis shown here is just for educational purpose and for my future reference.trade should not be taken solely on its basis.
adding moon phases to this cycle we can get to know the harmonic of the 55 day cycle.here it seems like post every full moon we are seeing either a significant rally or a consolidation meaning prior trend either reverses or takes a pause after a full moon.we have a full moon on 16th may indicating current selling momentum can decrease and we can see some sort of consolidation or a small rally.
we are also seeing index at previous support(shown in blue line),although breached on 12th may,we haven't seen a follow through meaning we havent seen a lower low in yesterdays trading session.now if on monday 16th may,we get a close above friday's high then we can assume a temporary bottom has been formed and selling would halt.
on a larger scale it seems like psubank index is forming head and shoulder top pattern neckline of which is breached at 2430.
scenario-1: for long trade
as price has breached support of 2420-30 with most of the momentum indicators showing over sold reading and monday being a full moon day,i am expecting at least current selling momentum/intensity to decrease and form a short term base(4-5 days) hence ideally one should go long if we get a close above fridays high(2500) with fridays low as initial stop-loss(2385),if trade works in favour then one should trail stop-loss as per one's risk apetite every day,as 55 day cycle is still in sell mode,i am not expecting major bottom to form before 31st may or rather a bottom formed around 31st may would be more significant.
scenario-2: for short trade
if stop-loss of scenario 1 is triggered then one should go short aggressively.i will update entry exit levels for short trade.
this index is not tradeble but this analysis can be used as a reference for trading in psu banking stocks.check the chart's of psubank which resembles index's price movement for trading.
in recent times due to intermediate trend being down,i have observed bullish trade setup's are not working hence one can even avoid taking long trade inspite of trade setup criteria being fulfilled by price just to avoid trading against the trend.
trade setup logic
1)use of reversal candle
2)price action support
3)moon phase
4)time cycle
5)pivot low
disclaimer:analysis shown here is just for educational purpose and for my future reference.trade should not be taken solely on its basis.