Price action during the week yet again formed a new high at 11461 and finally closed at 11372. Price action had formed a Bearish Single Key reversal bar in the last week. Due to a bearish single key reversal price we had formed a bearish expectation, only on price breaking the low of the bearish single key reversal bar. But in the current week price invalidated the bearish expectation by making a new high at 11461 without breaking the low at 11111.
Weekly Price Action Analysis
Weekly Price Bar Structure:
Price Action formed an Up Bar by making a new high at 11461 and a higher low at 11144.
Price bar Range:
The range of the current week price bar is 316 compared to the previous week range of 262 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 upper one third of the range indicating buyers in control. Although the close (11372) is in the upper one third of price bar range, the current close is marginally below the previous high (11374).
Body Size:
The size of body (123) is lesser than the wick ((193) both upper and lower wick combined). The current price bar is indeed a Bullish price bar but with a short body indicating weak bullishness as a result of lack of strength, due to reduced commitment from buyers. Since the body size is lesser than the wick a detailed analysis of wick, buying and selling pressure is required to determine who is in control? Buyers or sellers and to what extent?
Wick Size:
Analysis of wick is required only when the size of the wick is greater than body. The size of upper wick is 89 and the size of lower wick is 104 and hence a large lower wick compared to the upper wick. The lower wick is just 1.1 times the size of upper wick indicating Indecision hence a further analysis of buying and selling pressure is required.
Buying and Selling Pressure:
The current price action depicts that buying pressure (227) is greater than selling pressure (89). Buying pressure is 2.5 times of the buying pressure indicating buyers in control. The strength is usually expressed in 3 degrees as Bullish, Strong Bullish, and Very Strong Bullish.The strength of the current price bar is Bullish.
Expectation and Confirmation:
The close suggests a bullish expectation, but a short body indicates Weak Bullishness as result of lack of strength due to reduced commitment from buyers. Further analysis of wicks indicate Indecision because buyers and sellers are equally matched and have no conviction. With the current price action analysis we form a cautious Neutral Expectation.
Daily Price Action Analysis
Price action on a daily time frame is pretty interesting.
• On Monday price formed an Inside Bar. With an Inside bar the low of the prior week was protected. The inside bar also displayed the characteristics of Bullish Pin Bar.
• On Tuesday price action formed an Up Bar by surpassing the previous high at 11374. The sentiment of the Up Bar was Strong Bullish.
• On Wednesday price witnessed a Gap Up opening indicating strength. But, right from the opening sellers took control and pushed the price towards low and finally to form an Open Close Reversal price bar. With an OCR price bar we formed a bearish expectation and waited for a confirmation.
• On Thursday price witnessed a Gap Down opening indicating weakness. The price bar of Thursday formed a bearish bar with the close in the lower one third of the range indicating sellers in control. Price breaking the low of the current price bar would have confirmed the bearish expectation,
• On Friday again price witnessed a Gap Up Opening indicating strength but, again price action witnessed rejection and bears over took the control from bulls. The characteristic of Friday’s price bar structure almost resembles the price bar structure of Wednesday.
With two gaps in the opposite direction price action formed islands. The gaps in the opposite direction followed by price rejection indicates a tug of war between the bulls and bears indicating no group in control. The price action from Tuesday to Friday has formed a consolidation price bar pattern LEDGE. Does a Ledge indicate a DISTRIBUTION phase? Only the time will confirm!
Expectation and Confirmation:
With a consolidation pattern on a daily time frame we form a Neutral expectation and will wait for a valid breakout form the range. In the current situation price action can result into following 3 scenarios:
Scenario 1:If price continues to trade within the upper resistance zone of 11461 and lower support zone of 11253 we continue with a Neutral Expectation.
Scenario 2:If price breaks the high of the consolidation pattern then we form a bullish expectation. The bar which breaks the high and closes above the high of consolidation pattern will be referred as the “Bullish Trigger Bar”. After a bullish trigger bar, only when price surpasses the high of trigger bar the bullish expectation will be confirmed.
Scenario 3: If price breaks the low of consolidation pattern we form a bearish expectation. The bar which breaks the low and closes below the low of consolidation pattern will be referred as referred as the “Bearish Trigger Bar. After the completion of a bearish trigger bar, only when price breaks the low of trigger bar the bearish expectation will be confirmed.
Key Levels and Weekly Volatility
With price making a new high the key level of the current trend is at 11111 and critical level at 10882. The current weekly volatility remains unchanged at 1.1 compared to previous weekly volatility of 1.1. The probable weekly returns is of 125 points from the weekly close, with a measured move in increments of 79 points.
Trade Plan
1. With a Neutral Expectation wait for a Bullish or a Bearish Trigger bar to form.
2. When we have a Bullish Trigger bar in place we can form a Bullish Expectation. Only when price surpasses the high of the Bullish Trigger Bar then the bullish expectation will be confirmed. With a confirmed Bullish expectation, a measured move towards 11565, 11669 and 11773 can be expected.
3.When we have a Bearish Trigger bar in place we form a Bearish Expectation. Only when price breaks the low of the Bearish Trigger Bar then the Bearish expectation will be confirmed. With a confirmed Bearish expectation, a measured move towards 11149, 11045 and 10943 can be expected.
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.
Weekly Price Action Analysis
Weekly Price Bar Structure:
Price Action formed an Up Bar by making a new high at 11461 and a higher low at 11144.
Price bar Range:
The range of the current week price bar is 316 compared to the previous week range of 262 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 upper one third of the range indicating buyers in control. Although the close (11372) is in the upper one third of price bar range, the current close is marginally below the previous high (11374).
Body Size:
The size of body (123) is lesser than the wick ((193) both upper and lower wick combined). The current price bar is indeed a Bullish price bar but with a short body indicating weak bullishness as a result of lack of strength, due to reduced commitment from buyers. Since the body size is lesser than the wick a detailed analysis of wick, buying and selling pressure is required to determine who is in control? Buyers or sellers and to what extent?
Wick Size:
Analysis of wick is required only when the size of the wick is greater than body. The size of upper wick is 89 and the size of lower wick is 104 and hence a large lower wick compared to the upper wick. The lower wick is just 1.1 times the size of upper wick indicating Indecision hence a further analysis of buying and selling pressure is required.
Buying and Selling Pressure:
The current price action depicts that buying pressure (227) is greater than selling pressure (89). Buying pressure is 2.5 times of the buying pressure indicating buyers in control. The strength is usually expressed in 3 degrees as Bullish, Strong Bullish, and Very Strong Bullish.The strength of the current price bar is Bullish.
Expectation and Confirmation:
The close suggests a bullish expectation, but a short body indicates Weak Bullishness as result of lack of strength due to reduced commitment from buyers. Further analysis of wicks indicate Indecision because buyers and sellers are equally matched and have no conviction. With the current price action analysis we form a cautious Neutral Expectation.
Daily Price Action Analysis
Price action on a daily time frame is pretty interesting.
• On Monday price formed an Inside Bar. With an Inside bar the low of the prior week was protected. The inside bar also displayed the characteristics of Bullish Pin Bar.
• On Tuesday price action formed an Up Bar by surpassing the previous high at 11374. The sentiment of the Up Bar was Strong Bullish.
• On Wednesday price witnessed a Gap Up opening indicating strength. But, right from the opening sellers took control and pushed the price towards low and finally to form an Open Close Reversal price bar. With an OCR price bar we formed a bearish expectation and waited for a confirmation.
• On Thursday price witnessed a Gap Down opening indicating weakness. The price bar of Thursday formed a bearish bar with the close in the lower one third of the range indicating sellers in control. Price breaking the low of the current price bar would have confirmed the bearish expectation,
• On Friday again price witnessed a Gap Up Opening indicating strength but, again price action witnessed rejection and bears over took the control from bulls. The characteristic of Friday’s price bar structure almost resembles the price bar structure of Wednesday.
With two gaps in the opposite direction price action formed islands. The gaps in the opposite direction followed by price rejection indicates a tug of war between the bulls and bears indicating no group in control. The price action from Tuesday to Friday has formed a consolidation price bar pattern LEDGE. Does a Ledge indicate a DISTRIBUTION phase? Only the time will confirm!
Expectation and Confirmation:
With a consolidation pattern on a daily time frame we form a Neutral expectation and will wait for a valid breakout form the range. In the current situation price action can result into following 3 scenarios:
Scenario 1:If price continues to trade within the upper resistance zone of 11461 and lower support zone of 11253 we continue with a Neutral Expectation.
Scenario 2:If price breaks the high of the consolidation pattern then we form a bullish expectation. The bar which breaks the high and closes above the high of consolidation pattern will be referred as the “Bullish Trigger Bar”. After a bullish trigger bar, only when price surpasses the high of trigger bar the bullish expectation will be confirmed.
Scenario 3: If price breaks the low of consolidation pattern we form a bearish expectation. The bar which breaks the low and closes below the low of consolidation pattern will be referred as referred as the “Bearish Trigger Bar. After the completion of a bearish trigger bar, only when price breaks the low of trigger bar the bearish expectation will be confirmed.
Key Levels and Weekly Volatility
With price making a new high the key level of the current trend is at 11111 and critical level at 10882. The current weekly volatility remains unchanged at 1.1 compared to previous weekly volatility of 1.1. The probable weekly returns is of 125 points from the weekly close, with a measured move in increments of 79 points.
Trade Plan
1. With a Neutral Expectation wait for a Bullish or a Bearish Trigger bar to form.
2. When we have a Bullish Trigger bar in place we can form a Bullish Expectation. Only when price surpasses the high of the Bullish Trigger Bar then the bullish expectation will be confirmed. With a confirmed Bullish expectation, a measured move towards 11565, 11669 and 11773 can be expected.
3.When we have a Bearish Trigger bar in place we form a Bearish Expectation. Only when price breaks the low of the Bearish Trigger Bar then the Bearish expectation will be confirmed. With a confirmed Bearish expectation, a measured move towards 11149, 11045 and 10943 can be expected.
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.
