Time to buy P&F Double Tops in Nifty!

Date: 15^th April 2013

I have received many mails during last week asking the same question. Why did I not suggest short trades or selling at rallies when I was mentioning the bearish target of charts?  

It is important to understand that though Nifty has turned from the mentioned resistance and seen the lows near 5477, price has only consolidated during last week. I don’t think there were any interesting opportunities for trading. We all know very basic thing in the business of trading that it is very important to know when not to trade!!

It is also very important to differentiate between analysis and trading. Every reading cannot be traded.

10 box Point and Figure Charts of Nifty for this week are shown in Figure 1 and 2 below. Nifty is hovering around support levels and prices are trying to settle some. Trend and count direction is negative. But base is formed and there can be affordable buying opportunity if double top buy signal is generated from here. It is not always advisable to buy double top signals in downtrend. But environment is affordable for long traders if that happens. At the moment double top buy signal will be generated above 5610.

Buy Nifty if it trades above 5610 or if double top buy signal is generated from here. We might see a tick of 5800 if that happens.

For those who trade P&F charts, wait for formation of higher ‘O’ from here and then buy when column of X forms. That will provide you affordable buying opportunity. Sell if double bottom occurs because trend is negative.

Let me also take this opportunity to thank the readers for praising, appreciating my work and sharing the feedback.!

    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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