Nifty at resistance! Don’t Short!!

Nifty at resistance! Don’t Short!!

Date: 29^th April 2013

Recent up move in Nifty has stunned many and suddenly all charts are becoming bullish!

I need to paste little longer term charts also along with our regular 10 box charts due to formation of long column of ‘X’ in short term charts.

Figure 1 and 2 shown below are 10 box charts. Figure 3 and 4 are 0.25% 3 box reversal charts plotted with closing prices and high low prices respectively. All charts are signaling that price is currently trading near Anchor point resistance levels. Cluster of these levels at multi frame charts reveals their significance. Bar charts are also signaling the stretch and people might talk about resistance near current levels.

This is about analysis. But should we go short at current levels being such a strong resistance level?

Let the price tell us if resistance is taken. And P&F is very clear about this. Sell only if P&F double bottom sell signal below Anchor Point is generated from here. Mute other voices to avoid temptations.

Rather Buy if new column of X is formed from here with stop loss placed at subsequent double bottom sell signal. Even subsequent Double tops are to be bought though we might see some sort of trap formation above anchor point but that’s only the assumption. As a trader I need to take signals in the direction of the trend.

Price behavior near Anchor Point levels give nice trading opportunities. I will write about it some other time for those who are interested.

For those who don’t understand P&F, Supports are around 5820 – 5840 and they are tradable. Long them with stoploss placed at 5790. Don’t short unless price closes below 5790!

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

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

 Figure 3: Nifty 0.25% x 3 CL Point and Figure Chart

    Figure 4: Nifty 0.25% x 3 HL Point and Figure Chart

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      - Prashant Shah

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