P&F column squeeze, Basic signals can guide!!
Date: 19th June
2014
High of 7700.05!! No, I am not
that precise in targets. In fact achievement of a bullish count in an uptrend
is treated as a bullish event. Nifty is trading around 7550 this morning after
recording the high on 11th June.
Figure 1 is 10 box value
P&F chart plotted with closing prices. Interesting setup of column squeeze
is developed in this chart. Call it triangle, sideways or anything else. This
squeeze is expected to be followed by expansion. Price trend is up and trading
way above bullish line.
Figure 2 is 10 box value
P&F chart plotted with High Low prices. Price is trading above 20 column
average line since breakout happened at 6300 levels. Circled area shows the
price noise and intraday day volatility. Last several sessions must have been
difficult for lower time frame traders.
This setup of column
squeeze provides excellent opportunity to trade P&F basic signals of Double
top buy and Double bottom sell. Various assumptions and analysis must be around
to call it top or pull back. One side will be proved wrong upon price breakout.
We want signal from price to follow. The narrowing columns make stop closure. Worry
of breakout signal proving false or trap can be dealt by making column reversal
as an exit strategy if breakout column happens to be long. Current range is
7640 – 7530 on closing basis.
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| Figure 1: Nifty 10 x 3 CL Point and Figure Chart |
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- Prashant Shah, CMT, CFTe
Disclaimer:
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 readers of this material should take their own professional advice before acting on this information.
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 readers of this material should take their own professional advice before acting on this information.
