Nifty continued to edge higher and is now less than 1% away from its 200-DMA. Nifty advanced for the fourth consecutive week and formed an up bar on a weekly time frame. Price witnessed a gap up opening on Monday and recorded a new high at 10848 and finally closed at 10768. The range of the current week (171) has decreased by almost 50% when compared with the previous week range (408) indicating dead market which moved little and covered less ground per unit time. The close of the current week is in the middle one-third of the range indicating indecision. The weekly price bar with a short body is indeed a bar, but with weak bullishness indicating lack of strength due to reduced commitment from traders.
On a daily time frame price formed a outside bar on Wednesday with higher compared to the previous day. With a outside we formed a expectation, but the expectation remains muted with the formation of double . Price neither breaking the low or the high of the outside bar is the reason behind the muted expectation. The expectation will be confirmed only on when price break and close below the low of the outside bar. The expectation will be invalidated if price doesn’t break the low of the outside bar, instead price surpasses the high of the outside bar.
There is a price bar pattern variation when Nifty Spot and Nifty July is compared. Nifty spot formed a double by the end of the week whereas, Nifty recorded a new high on Thursday and finally closed the week with a down bar with the formation of a swing high. The current weekly decreased to 2.6 compared to previous weekly of 3.6. The probable weekly returns is of 282 points from the weekly close, with a measured move in increments of 43 points.
The key level of the existing trend is at 10194 and the critical level at 9544. The point of control of Nifty Spot for the upcoming week is in the zone of 10763.Price staying above the point of control can find minor resistance in the zone of 10806 and major resistance in the zone of 10848. Price surpassing the previous major resistance can further move towards the zone of 10891 and 10933. Price breaking point of control can find minor support in the zone of 10719 and major support in the zone of 10677. Price breaking below the major support can move lower towards the zone of 10677 and 10634.
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.
Point of Control: 10763
Think of Point of control as a zone, where you can find concentration of order flow in the market.The concentration in order flow is due to the sentiment of the collective psychology of market participants. And price moves with whichever crowd most desperately needs to act.
In a nutshell,
1.Price movement results, from a supply or demand imbalance
2.Changes in supply and demand occur as sentiment changes within the market participants.
3.Price therefore depends on the bullish or bearish sentiment of market participants.
4.The net sum of all individual trader decisions and actions, form the Net Order Flow.
5.When Net Order Flow is bullish (demand greater than supply), price will rise.
6.Price continues to rise until we run out of buyers at higher prices, or until the higher prices attract sellers in sufficient quantity to overcome demand.
7.When Net Order Flow is bearish (supply greater than demand), price will fall.
8.Price continues to fall until we run out of sellers at lower prices, or until the lower prices attract buyers in sufficient quantity to overcome supply.
So an individual should be aware of the point of control so that one can be in the direction of smart money flow, which increases the odds of the game of probability.
A. If you find a trading opportunity with a BULLISH TRADE SETUP above the point of control then your trading decisions should be orientated towards LONG positions.
B. If you find a trading opportunity with BEARISH TRADE SETUP below the point of control then your trading decisions should be orientated towards SHORT positions.
C.If you don’t find any trading opportunity near the point of control then it is always better to be on sidelines.
NOTE: One should not just initiate a long or a short position on price crossing above or below the point of control rather, one should wait for a LOW RISK HIGH PROBABILITY TRADE SETUP above or below in close proximity to the point of control.