Nifty P&F analysis: Resistance coming? Medium term not bullish!!

Resistance coming? Medium term not bullish!!

Date: 15th Feb 2015

 

Nifty last closing price: 8805.5

 

 

Daily chart

Figure 1 is 10 box P&F chart plotted with daily closing prices. We discussed during last write up that Support is coming and expected area was shown in the chart. It worked well and price witnessed sharp bounce. Chart is trading above trend line hence trend remains bullish. But last pattern is High Pole bearish formation hence there is no active trade at the moment. Next basic signal is awaited to form trading setup on this time frame. In simple words, there is no signal for positional trades at the moment.

 

1 Min Chart

Figure 2 is 5 box P&F chart plotted with closing prices of every minute. Price traded some more below support levels discussed during last week and then bounced. The beauty of P&F charts is that pattern confirms such things to validate our analysis or assumptions and help us in timing the trades well. The chart generated bullish signals near support zone and formed mini bottoms with bullish trend lines. Trend is bullish at the moment on this time frame. Some resistance is expected around 8840 - 8870 which is near Anchor Point and Fib retracement levels of previous move. Again, this is the assumption and pattern near it will generate trading opportunities. Remain with 'X' till then.  

 

Both time frame are bullish hence 'X' is trade able. But recent High Pole formation in Nifty and series of 'O'  formed in Relative strength chart of Bank Nifty to Nifty (Figure 3) has made things not look very bullish to me. Normally a follow through happens and that's where the strength of the trend will be tested. The structure remains weak over medium term unless this setup gets negated.

 

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



Figure 3: Bank Nifty Relative Strength Chart

 

 

 -  Prashant Shah, CMT, CFTe

 

 

 

 

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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.