"Mathematical science, which is the only real science that the entire civilized world has agreed upon, furnishes unmistakable proof of history repeating itself and shows that the cycle theory, or harmonic analysis, is the only thing that we can rely upon to ascertain the future.” – William Delbert Gann
Without mathematics there is nothing you can do. Everything around you is mathematics. Everything around you is numbers. Math and numbers has always amazed me. Why am I talking about math and numbers? Let’s find out. On a daily time frame price action formed a higher swing low at 11111 on 14 August 2020. From this swing low price traveled further for 11 days by 684 points to make a new high at 11795 and formed a Bearish Outside bar. For the first time the weekly close is at 11333 below the previous weeks low since 22 May 2020.
Weekly Price Action Analysis
Weekly Price Bar Structure:
Price recorded a new high at 11795 by breaking the previous weeks high and made a higher high. From the high, price action also broke the previous weeks low and formed a lower low. Price Action on a weekly time frame formed a Bearish Outside Bar.
Price bar Range:
The range of the current week price bar is 491 compared to the previous week range of 276 which makes the current week price bar a wide ranged price bar. Wide ranged price bars represent active markets, where the price movement is more than the normal indicating increased volatility.
Position of Close:
The position of close is in the lower one third of the range indicating sellers have taken control over the buyers.
Body Size:
The size of body (444) is greater than the wick ((47) both upper and lower wick combined) which indicates active participation by sellers.
BORA:
The body to range percentage indicates the extent of strength. The current week BORA is at 90 indicating very strong bearishness.
Wick Size:
Analysis of wick is required only when the size of wick is greater than body. In the current scenario the size of wick (47) is lesser than the body (444) hence a detailed analysis of wick is not required.
Buying and Selling Pressure:
The current price action depicts that selling pressure (460) is greater than buying pressure (30). Selling pressure is 15.3 times of the buying pressure indicating sellers in total control. The strength is usually expressed in 3 degrees as Bearish, Strong Bearish, and Very Strong Bearish. Since the selling to buying pressure is at 15.3 the strength of the current price bar is Very Strong Bearish.
Expectation and Confirmation:
With the current price action analysis we form a Bearish Expectation for the upcoming week. The bearish expectation will be confirmed only when price breaks the low of the Bearish Outside Bar at 11303. The bearish expectation will be invalidated on price surpassing the high of the Bearish Outside price bar at 11795. A further analysis of daily time frame will give us more clarity in relation to the weekly analysis.
Daily Price Action Analysis
On a daily time frame price action from Monday to Thursday formed a consolidation price bar pattern Forward Range. Forward range occurs when the price range of the fourth price bar engulfs the highs and lows of the last three price bars. A Forward Range pattern represents stagnant or contracting price ranges.
In the present scenario after the Forward range price action formed a Bearish Trigger Bar (TB: BE) on Friday by breaking the low of the mother bar (MB) of the forward range. The most important thing to observe is that Trigger Bar broke the low of mother bar by making a low at 11325 but the close of the trigger bar is within the range of the Mother Bar.
Expectation and Confirmation:
With the current price action analysis of daily time frame we form a Bearish Expectation. The bearish expectation will be confirmed only when price breaks the low of the Bearish Trigger Bar at 11303. The bearish expectation will be invalidated on price surpassing the highest high of the price bars within the range of mother bar which is at 11585.
Key Levels and Weekly Volatility
The key level of the current trend is at 11111 and critical level at 10882. A faster price break below the key level in less than 11 days from the recent swing high at 11795 will be the first indication of change in the overall market direction. The current weekly volatility increased to 1.6 compared to previous weekly volatility of 1.1. The probable weekly returns is of 135 points from the weekly close, with a measured move in increments of 123 points.
Trade Plan
The point of control of Nifty Spot for the upcoming week is in the zone of 11550. Price surpassing the point of control can find minor resistance in the zone of 11672 and major resistance in the zone of 11795. Price surpassing the major resistance at 11795 can further move towards the zone of 11917 and 12040.
Price staying below the point of control can find minor support in the zone of 11426 and major support in the zone of 11304. Price breaking below the major support can move much lower towards the zone of 11181 and 11058.
Disclaimer
All trade ideas published here are for educational purpose only. 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.
Without mathematics there is nothing you can do. Everything around you is mathematics. Everything around you is numbers. Math and numbers has always amazed me. Why am I talking about math and numbers? Let’s find out. On a daily time frame price action formed a higher swing low at 11111 on 14 August 2020. From this swing low price traveled further for 11 days by 684 points to make a new high at 11795 and formed a Bearish Outside bar. For the first time the weekly close is at 11333 below the previous weeks low since 22 May 2020.
Weekly Price Action Analysis
Weekly Price Bar Structure:
Price recorded a new high at 11795 by breaking the previous weeks high and made a higher high. From the high, price action also broke the previous weeks low and formed a lower low. Price Action on a weekly time frame formed a Bearish Outside Bar.
Price bar Range:
The range of the current week price bar is 491 compared to the previous week range of 276 which makes the current week price bar a wide ranged price bar. Wide ranged price bars represent active markets, where the price movement is more than the normal indicating increased volatility.
Position of Close:
The position of close is in the lower one third of the range indicating sellers have taken control over the buyers.
Body Size:
The size of body (444) is greater than the wick ((47) both upper and lower wick combined) which indicates active participation by sellers.
BORA:
The body to range percentage indicates the extent of strength. The current week BORA is at 90 indicating very strong bearishness.
Wick Size:
Analysis of wick is required only when the size of wick is greater than body. In the current scenario the size of wick (47) is lesser than the body (444) hence a detailed analysis of wick is not required.
Buying and Selling Pressure:
The current price action depicts that selling pressure (460) is greater than buying pressure (30). Selling pressure is 15.3 times of the buying pressure indicating sellers in total control. The strength is usually expressed in 3 degrees as Bearish, Strong Bearish, and Very Strong Bearish. Since the selling to buying pressure is at 15.3 the strength of the current price bar is Very Strong Bearish.
Expectation and Confirmation:
With the current price action analysis we form a Bearish Expectation for the upcoming week. The bearish expectation will be confirmed only when price breaks the low of the Bearish Outside Bar at 11303. The bearish expectation will be invalidated on price surpassing the high of the Bearish Outside price bar at 11795. A further analysis of daily time frame will give us more clarity in relation to the weekly analysis.
Daily Price Action Analysis
On a daily time frame price action from Monday to Thursday formed a consolidation price bar pattern Forward Range. Forward range occurs when the price range of the fourth price bar engulfs the highs and lows of the last three price bars. A Forward Range pattern represents stagnant or contracting price ranges.
In the present scenario after the Forward range price action formed a Bearish Trigger Bar (TB: BE) on Friday by breaking the low of the mother bar (MB) of the forward range. The most important thing to observe is that Trigger Bar broke the low of mother bar by making a low at 11325 but the close of the trigger bar is within the range of the Mother Bar.
Expectation and Confirmation:
With the current price action analysis of daily time frame we form a Bearish Expectation. The bearish expectation will be confirmed only when price breaks the low of the Bearish Trigger Bar at 11303. The bearish expectation will be invalidated on price surpassing the highest high of the price bars within the range of mother bar which is at 11585.
Key Levels and Weekly Volatility
The key level of the current trend is at 11111 and critical level at 10882. A faster price break below the key level in less than 11 days from the recent swing high at 11795 will be the first indication of change in the overall market direction. The current weekly volatility increased to 1.6 compared to previous weekly volatility of 1.1. The probable weekly returns is of 135 points from the weekly close, with a measured move in increments of 123 points.
Trade Plan
The point of control of Nifty Spot for the upcoming week is in the zone of 11550. Price surpassing the point of control can find minor resistance in the zone of 11672 and major resistance in the zone of 11795. Price surpassing the major resistance at 11795 can further move towards the zone of 11917 and 12040.
Price staying below the point of control can find minor support in the zone of 11426 and major support in the zone of 11304. Price breaking below the major support can move much lower towards the zone of 11181 and 11058.
Disclaimer
All trade ideas published here are for educational purpose only. 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.
Comment:
Price broke Fridays low of 11303 but currently trading within the First hour range. The high of the first hour range at 11373 and low of the first hour range at 11266 is of utmost importance.
Comment:
A DECISIVE move below 11250 will be the confirmation for a DOWN MOVE to continue.