Nifty Point & Figure analysis : Nifty forms Mini Bottom!!

Nifty forms Mini Bottom!!

Date: 1^st December 2013

As expected, Nifty was range bound during last week and there was no signal to trade until Friday. Double Top Buy signal has occurred on Friday when Nifty traded above 6120.

Chart analysis:

Figure 1 is 10 box chart plotted with closing prices. Double Top Buy signal is formed after consolidating columns. And important thing is that Mini Bottom is confirmed at 5990 with this Buy signal. This has made setup very interesting and tradable. Mini Bottom has given opportunity to draw 45 degree internal line from 5990.This has helped bulls in trailing the trendline to upper level that has made long trades affordable. Vertical count of 6330 has got activated as well. More counts will be activated if price closes above 6200.

Figure 2 is same chart plotted with High Low prices. Nifty took Support at same box value of 5980 after Opposing Poles and now Double Top Buy Signal is triggered.

I expect some more range bound moves but ‘X’ has given breakout and must take this Double Top Buy signal for reasons discussed in earlier posts. Close below 6050 will result in Bull trap signal hence longs should be exited if that happens.

P&F strategy for next week:

Remain long and trade ‘X’s unless price closes below 6050. Short trades to be taken only below recent 45 degree line plotted from Mini bottom.

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

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

                               

                                       

 -  Prashant Shah, CMT, CFTe

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