Nifty approaching Resistance! Enjoy the truncated week.

Nifty approaching Resistance! Enjoy the truncated week.
Date: 10^th September 2013

Nifty closed at 5680 on last Friday. As mentioned, 5680 – 5700 was possible if price manages closed above 5480. But agreed that fall of 200+ points in Nifty on Tuesday must have shaken longs and triggered them out. Shifting to P&F column change strategy worked in this case. Figure 3 explains P&F basic and column reversal patterns. 

Larger term trend is down and I believe that we are witnessing a corrective rally. Several upside counts are developed during recent bottom formation. Two counts are shown in Figure 1. Count of 6070 is valid and active. But my experience suggests that count from previous column in case of vertical reversal is more effective and that comes at 5790 at present. Bounce from anchor point with bear trap formation has made the setup affordable for bulls.

Upside count direction and important resistance setup is pointing towards 5800. But resistance is a resistance when it is taken. Anticipating them is a dangerous business. Hence, wait for double bottom sell signal even when price approaches near resistance. Strategy from column change should be shifted to basic signals now. There is some possibility of price consolidation (Noise in price time charts). Better to enjoy the truncated week and look for good reasons to trade. Wait for the double top or double bottom signal to occur.

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

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

Figure 3 A: P&F Basic Double Top Buy and Double Bottom Sell signals

Figure 3B : P&F Column Reversal Signals

 -  Prashant Shah

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