Price Action Analysis:
The present scenario in Nifty reminds me of a paradigm MOB - Make or Break situation. The previous week price bar structure was a Bearish SKR. On Monday price opened at 11057 and recored a low 10882 breaking the low of previous two weeks. But the low of Monday was protected throughout the current week and price advanced making higher low and higher high daily price bar pattern (up bars) finally to close at 11214.
The current week price bar made a new low (10882) breaking the previous week low but, closed (11214) above the previous two weeks close (11074 and 11194). As a result of the present price action the current price bar structure nomenclature is Bullish DKR. A Bullish DKR price bar preceded by a Bearish SKR price bar reflects a tug of war between the buyer and sellers. The question in the mind of every trader is that if a tug of war exists between bulls and the bears, then who will win the battle? As a result of the present price action, the current price bar structure nomenclature is MOB. With the present price structure MOB, the price action in the upcoming week can result into either of the following 3 scenarios.
Scenario 1: A Bullish expectation can be formed if price breaks the high of the Bullish DKR price bar (11257) without violating the low (10882). Price breaking the high without violating the low of Bullish DKR is just an indication but the confirmation for the Bullish expectation is only when price surpasses the high of Bearish SKR at 11342.
Scenario 2: A Bearish expectation and confirmation will come into action if price breaks the low of Bullish DKR price (10882) without surpassing the high of Bullish DKR (11257).
Scenario 3: A Neutral expectation will come into action if price neither breaks the high of Bearish SKR (11342) nor the low of Bullish DKR (10822). With a neutral expectation it is always better to stay on sidelines.
With a MOB in place there is a high probability that price action can result in false breakouts near the support and resistance zone. One should always pay special attention and assess the mass sentiment of the heterogeneous group rather than just looking at patterns.On a daily time frame price action formed an Inside bar on Friday. The prior bar, the bar before the inside bar, is referred to as the “Mother Bar”.With the completion of an inside bar one can observe that price neither surpassed the high of mother bar nor violated the low of the preceding bar indicating indecision. Inside Bar also indicate that the prevailing momentum has dissipated because buyers and sellers are equally matched and have no conviction. An Inside Bar usually represents market indecision. In terms of demand and supply, an Inside Bar indicates that, demand and supply are in state of equilibrium and hence a period of consolidation. With an Inside Bar we neither have a Bullish nor a Bearish expectation and hence form a neutral expectation. If price surpasses and close above the high of the mother bar then we form a Bullish Expectation and if price breaks and close below the low of mother bar then we form a Bearish expectation. With this detailed price action analysis let’s just follow the foot prints of price. For trading decision one need to wait for a suitable Low Risk High Probability trade opportunities.
The current weekly volatility decreased to 1.4 compared to previous weekly volatility of 2. The probable weekly returns is of 162 points from the weekly close, with a measured move in increments of 94 points. Price is trading within the zone of, January quarterly range resistance zone 11201 and March quarterly resistance zone 11178.
Stock Market Seasonality
August 8 marks a very important date according to seasonality. The day is considered as a minor seasonal date which is halfway between the major seasonal levels of June 22 and September 23. On this day price action formed an Inside Bar and hence the high and low of the mother bar will be of utmost importance in determining the future price action.
Trade Plan
The point of control of Nifty Spot for the upcoming week is in the zone of 11069. Currently price is trading in the mid zone of minor resistance zone at 11163 and major resistance zone at 11257. Price slipping below the minor resistance at 11163 can move towards the point of control at 11069. Price surpassing the major resistance at 11257 can further move towards the zone of 11350 and 11444.
Price violating the point of control at 11069 can find minor support in the zone of 10975 and major support in the zone of 10882. Price breaking below the major support can move much lower towards the zone of 10788 and 10694.
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.
The present scenario in Nifty reminds me of a paradigm MOB - Make or Break situation. The previous week price bar structure was a Bearish SKR. On Monday price opened at 11057 and recored a low 10882 breaking the low of previous two weeks. But the low of Monday was protected throughout the current week and price advanced making higher low and higher high daily price bar pattern (up bars) finally to close at 11214.
The current week price bar made a new low (10882) breaking the previous week low but, closed (11214) above the previous two weeks close (11074 and 11194). As a result of the present price action the current price bar structure nomenclature is Bullish DKR. A Bullish DKR price bar preceded by a Bearish SKR price bar reflects a tug of war between the buyer and sellers. The question in the mind of every trader is that if a tug of war exists between bulls and the bears, then who will win the battle? As a result of the present price action, the current price bar structure nomenclature is MOB. With the present price structure MOB, the price action in the upcoming week can result into either of the following 3 scenarios.
Scenario 1: A Bullish expectation can be formed if price breaks the high of the Bullish DKR price bar (11257) without violating the low (10882). Price breaking the high without violating the low of Bullish DKR is just an indication but the confirmation for the Bullish expectation is only when price surpasses the high of Bearish SKR at 11342.
Scenario 2: A Bearish expectation and confirmation will come into action if price breaks the low of Bullish DKR price (10882) without surpassing the high of Bullish DKR (11257).
Scenario 3: A Neutral expectation will come into action if price neither breaks the high of Bearish SKR (11342) nor the low of Bullish DKR (10822). With a neutral expectation it is always better to stay on sidelines.
With a MOB in place there is a high probability that price action can result in false breakouts near the support and resistance zone. One should always pay special attention and assess the mass sentiment of the heterogeneous group rather than just looking at patterns.On a daily time frame price action formed an Inside bar on Friday. The prior bar, the bar before the inside bar, is referred to as the “Mother Bar”.With the completion of an inside bar one can observe that price neither surpassed the high of mother bar nor violated the low of the preceding bar indicating indecision. Inside Bar also indicate that the prevailing momentum has dissipated because buyers and sellers are equally matched and have no conviction. An Inside Bar usually represents market indecision. In terms of demand and supply, an Inside Bar indicates that, demand and supply are in state of equilibrium and hence a period of consolidation. With an Inside Bar we neither have a Bullish nor a Bearish expectation and hence form a neutral expectation. If price surpasses and close above the high of the mother bar then we form a Bullish Expectation and if price breaks and close below the low of mother bar then we form a Bearish expectation. With this detailed price action analysis let’s just follow the foot prints of price. For trading decision one need to wait for a suitable Low Risk High Probability trade opportunities.
The current weekly volatility decreased to 1.4 compared to previous weekly volatility of 2. The probable weekly returns is of 162 points from the weekly close, with a measured move in increments of 94 points. Price is trading within the zone of, January quarterly range resistance zone 11201 and March quarterly resistance zone 11178.
Stock Market Seasonality
August 8 marks a very important date according to seasonality. The day is considered as a minor seasonal date which is halfway between the major seasonal levels of June 22 and September 23. On this day price action formed an Inside Bar and hence the high and low of the mother bar will be of utmost importance in determining the future price action.
Trade Plan
The point of control of Nifty Spot for the upcoming week is in the zone of 11069. Currently price is trading in the mid zone of minor resistance zone at 11163 and major resistance zone at 11257. Price slipping below the minor resistance at 11163 can move towards the point of control at 11069. Price surpassing the major resistance at 11257 can further move towards the zone of 11350 and 11444.
Price violating the point of control at 11069 can find minor support in the zone of 10975 and major support in the zone of 10882. Price breaking below the major support can move much lower towards the zone of 10788 and 10694.
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.
