Sell Rallies, Avoid Breakouts!!
Date: 10^th June 2013

Nifty went below 5960 during last week and has seen the low of 5871. My view remains same. I expect prices to go below 5800 though it may not happen vertically. This is price consolidation and was expected after band expansion. It is always difficult to trade in P&F band contraction due to price squeeze that cuts stoploss of traders both the side, hence not the favorable scenario for trading breakouts!

Trend for short term traders is down and resistance is at 5960 levels. It may see 6030 – 6040 if that is taken but I would suspect that bounce. Ignore shorts above 5990 due to Double top buy above Anchor point levels but you have a signal if that is not sustained. As can be seen from Figure 1 and 2, several down side counts are activated during last week. 

Sell Rallies below 5990, cut them early and beware of people who change their stand everyday and with every 30 – 50 points move!!

For P&F Traders, Trade double bottoms and ignore atleast first double top buy from here. Subsequent formation of X can be traded. Experienced P&F traders can trade all formation of Os as of now.

 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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