Nifty - Point and Figure Analysis: June 2013

Sunday 30 June 2013

Forget shorting for a while!!
Date: 1^st July 2013

View and levels of last week did well. I mentioned that fresh shorts need aggressive exits and Double Top buy should be taken due to hint of supports around 5600 box value. The support was taken and Double Top Buy signal was triggered in the chart above 5670 level that also activated the vertical count of 5840.

Figure 1 is 10 box P&F chart plotted with closing prices. Price has reversed from multiple 45 degree internal lines and Anchor Point levels with Low Pole formation that makes the reversal most important. Figure 2 is a chart plotted with High Low prices. As can be seen from the chart, price has reversed from lower Bollinger band and generated a Double Top Buy signal. We did not get Double Bottom Sell pattern below 45 degree lines in both the charts. This is an important piece of information.

The set up is looking good to me. We can’t always get vertical reversals but formation is making possibility of 5960 – 5980 live and I would recommend buying corrective moves from here. Atleast forget shorting unless we trade below 5700.

For P&F Traders, Don’t miss Double Top Buy Signals and Ignore Double Bottom Sell signal atleast for a while. Aggressive traders can buy formation of Xs.

Figure 1: Nifty 10 x 3 CL Point and Figure Chart

Figure 2: Nifty 10 x 3 HL Point and Figure Chart

- - Prashant Shah

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All information provided above is for general information purposes only and does not constitute any investment advice. Company or Author shall not be liable for loss or damage that may arise from use of information provided above. The report is purely for information purposes and does not construe to be investment recommendation/advice or an offer or solicitation of an offer to buy/sell any securities. The opinions expressed are current opinions as of the date appearing in the material and may be subject to change from time to time without notice. Investors should not solely rely on the information contained in this document and must make investment decisions based on their own investment objectives, risk profile and financial position. The readers of this material should take their own professional advice before acting on this information.

Sunday 23 June 2013

Fresh shorts need aggressive exit, Longs need double top buy signal!!
Date: 24^th June 2013

View of selling rallies worked quiet well. Price did not sustain at higher levels & double bottoms or formation of O must have done well to traders.

Nifty has seen lows at 5616 levels on last Friday. Figure 1 is 10 box Point and Figure chart of Nifty plotted with closing prices. There is a hint of support around here if looked at left. Figure 2 is 10 box chart plotted with High low prices that shows that price is trading below 20 column lower band. P&F is a great tool to deal with such kind of hints and evidences. Let double top occur to confirm the reversals!

Trend is down and supports are near 5600 box value. I am yet to study astrology to know if that support will be taken but fresh shorts from here should be traded with aggressive exits.

For P&F Traders, Trade double bottoms and exit at formation of Xs. Double top from here is worth taking.

Figure 1: Nifty 10 x 3 CL Point and Figure Chart

Figure 2: Nifty 10 x 3 HL Point and Figure Chart

- - Prashant Shah

Sunday 9 June 2013

Sell Rallies, Avoid Breakouts!!
Date: 10^th June 2013

Nifty went below 5960 during last week and has seen the low of 5871. My view remains same. I expect prices to go below 5800 though it may not happen vertically. This is price consolidation and was expected after band expansion. It is always difficult to trade in P&F band contraction due to price squeeze that cuts stoploss of traders both the side, hence not the favorable scenario for trading breakouts!

Trend for short term traders is down and resistance is at 5960 levels. It may see 6030 – 6040 if that is taken but I would suspect that bounce. Ignore shorts above 5990 due to Double top buy above Anchor point levels but you have a signal if that is not sustained. As can be seen from Figure 1 and 2, several down side counts are activated during last week.

Sell Rallies below 5990, cut them early and beware of people who change their stand everyday and with every 30 – 50 points move!!

For P&F Traders, Trade double bottoms and ignore atleast first double top buy from here. Subsequent formation of X can be traded. Experienced P&F traders can trade all formation of Os as of now.

Figure 1: Nifty 10 x 3 CL Point and Figure Chart

Figure 2: Nifty 10 x 3 HL Point and Figure Chart

- - Prashant Shah

Sunday 2 June 2013

A tick below 5960 will make us see 5820!!
Date: 3^rd June 2013

We had a flat last week if weekly closing prices are compared!! The rally of Monday turned out to be the trapping pattern for bulls. I was asked an interesting question for the title in the last week write up asking not to long. I was asked that why I didn't suggest to go short instead of saying ‘Don’t Long’!!

This is important to understand. Trading strategies cannot be only abut Long and Short. Not to long, Not to short or avoid the counter are the important aspects of the trading business. We decide not to long when short is not affordable. Shorts or bears must have been triggered out by Monday rally.

I wrote in summary that P&F traders can go short in next formation of O. Column of O is formed in closing price chart when Nifty went below 5990 (Figure 1).

10 box High Low chart has formed Double bottom sell signal below 6070 box value and count directions of 5970 and 5720 are been activated. As can be seen from the chart, The set up is been negative for prices in near term. Double bottom sell signal after High Pole, Relative High and Bull trap is the signal not to be missed.

As saild earlier, I expect some price consolidation. We might see some range bound moves in days to come. A tick below 5960 from here would be very bearish for the prices and might trigger a drop till 5820 – 5770 levels. 6140 is a trend reversal point for this negative set up. More up counts will be activated if that level is been breached.

For P&F Traders, Trade double bottoms and ignore double tops as of now. Experienced P&F traders can trade formation of Os as well.

Figure 1: Nifty 10 x 3 CL Point and Figure Chart

Figure 2: Nifty 10 x 3 HL Point and Figure Chart

- - Prashant Shah