Nifty P&F analysis: What’s in store? Worship ‘X’ to know!!

What’s in store? Worship ‘X’ to know!!

Date: 31^st March 2014

When trend is up, everything becomes ‘X’. Price went above 6540 to trigger the buy signal as explained during last week. Exit conditions are not met since then and trade is on.

Chart analysis:

Figure 1 is 10 box value chart plotted with closing prices. Mentioned in last post that there is absolutely no reason to be bearish and Double Top buy signal above 6540 is a statistically profitable set up. Backtested results of the pattern (Double top buy above upper band) are shown in Figure 3. 10 box is 0.15% of current levels hence that box value is used for back testing. A lot can be discussed about numbers but in brief and simple words, there is higher probability that Nifty will not breach 6480 before making higher bottom.

Figure 2 is 10 box value chart plotted with High Low prices. Price witnessed bullish breakout from the consolidating columns developed prior to last week. The Anchor point of the uptrend is at 6500 levels now which might act as a support if price corrects.

Set up is bullish, price is going up. There was not even single ‘O’ formed during last week in either chart. There is no reason to think bearish at this moment. Rather a bearish double bottom sell from here will be an opportunity to trail the Bottom to higher levels.

Where is resistance and how far price will go from here? There is no need to know it.

I have mentioned during last posts that counts of 7000+ are open in Nifty and count direction is been up. Only ‘X’ knows what’s in store. Worship and follow it. All the macro, micro numbers of all sorts of analysis comes to it when trend is up.

I asked for trading long above 6540 and exit at column reversal because my general observation is been that the first breakout from narrow range proves misleading. There is no column reversal since breakout and trade is on.

One can exit at column reversal from here but must re-enter when ‘X’ appears. I would recommend staying long unless we get Double bottom sell or High pole. High Pole will be formed if price trades below 6610 from current levels. Levels will be changed if price trade at higher box values from here.

P&F strategy for next week:

Remain long unless exit conditions explained above are met. It’s a sin to miss ‘X’!!

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

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

Figure 3: 0.15% x 3 cl BT result of DTbuy above upper band

                                     

 -  Prashant Shah, CMT, CFTe

Disclaimer:
All information provided above is for general information purposes only and does not constitute any investment advice. Company or Author shall not be liable for loss or damage that may arise from use of information provided above. The report is purely for information purposes and does not construe to be investment recommendation/advice or an offer or solicitation of an offer to buy/sell any securities. The readers of this material should take their own professional advice before acting on this information.