Nifty - Point & Figure analysis

Oversold!!

Date: 14th June 2015
 
Nifty last closing price: 7982.90

Daily chart (Medium - Intermediate trend)

 

Figure 1 is 10 box P&F chart plotted with daily closing prices.  

·         Last Pattern: Double bottom sell (Bearish)

·         Last Column: Bearish

·         45 degree trend: Bearish, At one 45 degree support line

·         Active count: 7630, 7480

·         Short exit level: 8130

  

8060 and 7930 both discussed during last week are achieved. More downside counts are open & price action in bearish. Bear trap will occur if price closes above 8130.

 

1 Min Chart (Short term trend)

Figure 2 is 5 box P&F chart plotted with closing prices of every minute. Lower counts up to 7900 are active. Chart is not bullish but Bear trap indicates support taken by price at 7945. Recovery is expected during coming week if these support levels are maintained.

Only 9 stocks from Nifty 50 are bullish on 1% box value at the moment. Bullish chart is where last signal is Double Top Buy signal. P&F breadth indicator 'Bullish percent' count the number of bullish and bearish stocks that provides clue for medium term trend. Reading below 20% is oversold zone. Current reading at 18% indicate that immediate downside is limited.

X-percent is another breadth indicator for short term trends. It calculates number of stocks where last column is 'X'. Current reading of this indicator is at 20% that suggests market is oversold even for shorter term.

This is not to call a bottom but to discuss the possibility of a meaningful bounce in short term. Certainly this cannot be traded unless price confirm.

 



Fig 1: Nifty dly 10 x 3 cl Point & Figure chart



Fig 1: Nifty1 min 5 x 3 cl Point & Figure chart

   

           

- Prashant Shah, CMT, CFTe

 

 

Disclaimer:
All information provided above is for general information purposes only and does not constitute any investment advice. The readers of this material should take their own professional advice before acting on this information.