Nifty Point & Figure analysis

Nifty P&F Analysis!!

Date: 1st November 2015

Nifty last closing price: 8065.80

Daily chart

Figure 1 is 10 box P&F chart plotted with daily closing prices. High pole got formed when price went below 8205 which was the trigger to exit longs as discussed during last week. Retracement has exceeded 100% of previous swing move to form 100% pole. Price is trading below 45 degree trend line hence setup has become bearish but Double bottom sell signal would provide confirmation. Hence a bounce not going above 8180 (mid column value) would provide a trading opportunity to bears. Interestingly, current formation is bearish broadening formation followed after bullish broadening formation that indicates difficult phase for trend followers.

Hourly Min Chart

Figure 2 is 10 box P&F chart plotted with hourly closing prices. 8130 and 8190 are resistance levels if price witness bounce from here (Trend line & Anchor point). Previous bear trap can provide short term support around 7960 as shown in the chart. 7820 is cluster of support levels where one should look for bullish setup.

Figure 3 is X-Percent P&F Breadth indicator of Nifty 50. This indicator was major reason I wrote not to initiate fresh longs. I believe that breadth analysis is the vital tool in any kind of a trading kit. Indicator is at 38% now which is a neutral zone.

Figure 4 is 0.50% box P&F chart of Nifty plotted with closing prices. This chart was discussed during last post with reason for expecting a resistance. It has worked well.

   

In brief

Setup is turning bearish. Follow through will generate trading opportunity. 8130, 8190 on the higher side and 7960, 7820 on the lower side are key reference levels for the reasons mentioned above.

- Prashant Shah, CMT, CFTe

Disclaimer:
All information provided above is for general information purposes only and does not constitute any investment advice. The readers of this material should take their own professional advice before acting on this information.