It has been a while since I have posted anything in this site. A few have raised questions if I have stopped writing. Just to allay such fears , I decided to put out this post. On a more serious note, the objective behind this post was to highlight how the fall yesterday should not have been a surprise if one was clued on to the key pointers and price action.
OK, I can hear a few shouts that this post is an exercise in post-mortem and would have served a better purpose had I posted it a day earlier. Point taken! I am still going ahead with it as I feel someone can pick up a trick or two and use it when a similar set of events pan out later.
Let’s start the port-mortem! Before that, let’s ask ourselves if the fall was triggered by the Greece-related developments ? Or, was the Greece-news just an excuse to engineer the reversal which has been a work-in-progress for a while? Sounds confusing? It’s not, just think.
Have a look at the daily chart of the Nifty Futures.
What a surprise that price turned right at the place where sellers were active earlier. Think about it in order flow terms. Am sure Market Profile (the in-thing now in social media) would have thrown up similar cues, but the terminology they use would be different. After a small base, price just broke down.
What causes price to make such one-sided movement? As I said, think in terms of order flow and Am not giving the answer. Please share your thoughts in the comments section below.
Off to the 15-minute chart of Nifty Futures.
Rather than putting out the details, I decided to keep it as a quiz. Let me know what the arrows in the above chart point to, or indicate. Can you make out what price is doing as it heads closer to the major decision point in the daily chart?
If you have answer to these questions, then you are all set to capitalise on the next move. The same or may be similar patterns or concepts play out time and again. We just need the patience and the skill to decipher the clues left behind by the pro-money. After all, those huge volumes of pro-money cannot be concealed beyond a point. They have to eventually manifest in price / volume action. And, trust me, the quick reversal with momentum is discernible and you can anticipate it well in advance.
Sir, are the arrows buying support giving up after supporting for 3-4 times? Same can happen if nifty revisits 7950 levels?
The arrows probably supports at lower support line of the rising wedge pattern as the price moves to apex of the pattern and range compression that would probably an early breakdown
there are sign of exhaustion.
What are the signs of exhaustion do you notice? Can you elaborate, so that it becomes easier to spot for others too.
Arrows >> last bit of buying absorbed, evident from buying tails. After all the absorption, crack was easy in the absence of any buyers.
Chirag Ghate says
Sir, Don’t know about the arrows but i can show you one very important thing on the first chart of Nifty(D) since that All time New High around 9120, it is making Lower Low & Lower High.
Chirag Ghate says
So, to break that pattern Nifty needs to go above 8480 which will invalidate the bearish trend & we may assume a good strong support around 7900 for the next big upmove on a larger TF.
Buying tails, but no strong follow up to break out?