Nifty Analysis based on Price Action
Updated
As we have seen in the past Nifty has fallen down much. Now, it is probably creating an Ascending Channel (This will be confirmed in few days time). All Ascending Channels are Bearish in nature and hence expecting this current Rally to take the price further down. Probably, we can expect a new low.
But Investors should not fear because after the new low, we can expect the price to start a new Up Trend.
This might take a long time,but the maximum draw down as of now, seems to be 7100 to 6300, as there are two good Trap Zones. And we can expect them to hold and start a new up trend. So, Investors should start to accumulate in Tranches (small quantities at every drop in price.)
In Short term, we can look for trading the Channel boundaries for both Long and Short trades. Especially, where there is a Confluence between the Trap Zones and the Channel boundaries. The Arrow I marked inside the channel depicts, what price behavior can happen inside the channel and beyond. We can follow this sequence to take both Long and Short Trades. But Expect Short Trades to give bigger and faster Targets. Infact, an Ascending channel should be traded on the Short side, as it is a Bearish Pattern.
The current volatility in Nifty is high and Nifty Daily ATR is approx 495, which is four times the previous Daily ATR, hence, price is creating Trap zones which are bigger in Risk. So, it is better to take a Price Action Entry, when price reaches the channel boundaries. This can reduce Risk and help to Time the Market with perfection.
Target should be opposite Channel boundary. Stop should be above / below the Trap zones marked in the chart.
Disclaimer: This analysis is based on Price Action. Price is dynamic, it may or may not follow the predictive price action marked in the chart. Whenever, there is a change in price action, we have to adjust accordingly. So, expert advice should be shorted before trading this levels. I am not liable for any loss or profit occurring to you by trading this ideas.
But Investors should not fear because after the new low, we can expect the price to start a new Up Trend.
This might take a long time,but the maximum draw down as of now, seems to be 7100 to 6300, as there are two good Trap Zones. And we can expect them to hold and start a new up trend. So, Investors should start to accumulate in Tranches (small quantities at every drop in price.)
In Short term, we can look for trading the Channel boundaries for both Long and Short trades. Especially, where there is a Confluence between the Trap Zones and the Channel boundaries. The Arrow I marked inside the channel depicts, what price behavior can happen inside the channel and beyond. We can follow this sequence to take both Long and Short Trades. But Expect Short Trades to give bigger and faster Targets. Infact, an Ascending channel should be traded on the Short side, as it is a Bearish Pattern.
The current volatility in Nifty is high and Nifty Daily ATR is approx 495, which is four times the previous Daily ATR, hence, price is creating Trap zones which are bigger in Risk. So, it is better to take a Price Action Entry, when price reaches the channel boundaries. This can reduce Risk and help to Time the Market with perfection.
Target should be opposite Channel boundary. Stop should be above / below the Trap zones marked in the chart.
Disclaimer: This analysis is based on Price Action. Price is dynamic, it may or may not follow the predictive price action marked in the chart. Whenever, there is a change in price action, we have to adjust accordingly. So, expert advice should be shorted before trading this levels. I am not liable for any loss or profit occurring to you by trading this ideas.
Trade closed: target reached
The first two legs happened as per expectation. So, closing this trade in Profit.
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