Hope you found my earlier post on the Nifty informative. It is just a question of sorting out swings and putting them in perspective. Once this is done, you will soon realise that every other tool or indicator works like a charm. Here is the quote from my earlier post:
Unless price moves above the recent high of 8,654.75 and more importantly above the red medianline, there is a reason to be cautious and suspect that “probably” a lower high is in place.
After today’s fall, the needle of suspicion has moved more towards the lower-high-scenario. Have look at the Nifty daily chart featured below.
Price has not managed to clear the donwsloping upper parallel of the Magenta fork, which is not a positive sign. Going by Alan Andews’ rules, price has a strong probability of reaching the median line or the middle line. The intersection of the two forks at 8,060-8,070 is a likely area price might get attracted to. That is my favored scenario as long as price trades below 8,655.
Let’s drill down to the hourly chart and look for some clue.
If you can develop an eye to spot those “decision points” you will be way ahead of the crowd. I have marked a couple of decision points in the chart above. I do not want to labor over this any further.
As always, share your comments / suggestions and views in the “Comments” section below. Hope some day I get surprised by a flurry of comments.
Comments 1
Dear KK,
It is nice follow up article. A H&S pattern also formed (July 6th L/S, July 22nd H, Aug 6th R/S) with a neck line low at 8330.Price has breached down the neck line. After some pull back to the neck line, price is expected to go down till 8030. Already daily RSI is in week zone.