Don’t Long, Wait for price consolidation!!
Date: 27^th May 2013

I asked in my last week write up to avoid Nifty and we had a bear week in deed wherein all the days of the week ended in red to form 5 red candles in the row!!

I demonstrated the possible scenarios for of double bottom sell signal formations in the last week write up and possibility of vertical fall shown in case 1 has turned out to be real. Also wrote about High Pole formation in that case which is been triggered in the charts at 50% retracement of last column of Xs as shown in below Figures 1 and 2 of 10 box P&F charts of Nifty.

It can be seen in the charts that Double bottom sell signal is generated in the prices and down side vertical counts are activated that suggests levels below 5800 in prices. I already have wrote about band expansion and so possible price squeeze in coming days. And so double bottom signal is to be taken. But as mentioned earlier, these are to be taken with aggressive exits because this is just the first sell signal in the uptrend.

In brief:

For P&F traders, Go short at next formation of O and apply aggressive exits.

For others, Resistance is around 6050 – 6070 levels. Look for opportunity to go short and keep booking profits. Don’t Long. Let price consolidate.

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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