Nifty Point & Figure analysis - 'X' got engulfed!!

'X' got engulfed!!

Date: 6th Jan 2014

Nifty last closing price: 8127.35

Daily chart

Figure 1 is 10 box value chart plotted with daily closing prices. Breakout has proved to be a bull trap and Double bottom sell signal has triggered in this chart. Current column of 'O' is High Pole that has generated sell signal in the same column. I call it a Bearish engulfing column. Basically it forms when High Pole & Bull trap occurs in the same column. Trading below 8080 will breach the bullish trend line and negate the upward counts that are still active.

1 Min Chart

Figure 2 is 5 box value chart plotted with closing prices of every minute. Resistance played role and reversal pattern High Pole occurred when Nifty went below 8427.  Column of High pole also formed Bearish engulfing and followed by Double bottom sell signal. Fall has negated some bullish counts and went below the support levels. Trend is down in this chart at the moment with active counts up to 7970 unless it trades above bearish trend lines placed around 8200 levels currently. 

Image 1 shows the Back testing results of Bearish Engulfing pattern occurred on daily chart of 0.15% box value.

Figure 1: Nifty daily 10 x 3 cl Point and Figure Chart

Figure 2: Nifty 1 min 5 x 3 cl Point and Figure Chart

  

Image 1: Back testing results of Bearish Engulfing pattern

 -  Prashant Shah, CMT, CFTe

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