We are one of those...
But there is a lot of benefits from stepping back and looking at the larger picture of the market, particularly at areas of congestion or at important reference levels such as the one we are at now.
So let' s look at what profile tells us :
Here's a monthly bar of the Nifty spot (taken 7/02/11).
There are references marked on the chart :
1) Point 1 is the excess low for the new uptrend from 2008.It's a long term excess low.
2) Excess high marked the end of the earlier auction.
3) is another excess high from early 2011 and late 2010.
4) 4964 represents the fairest price for the move from point 1 to point 3.
5) is the breakout from this level in mid 2010
6) a one time frame market resulted from this breakout.
7) Did not take out the excess high from 2.
Let's look at the weekly bar of the Nifty spot now (taken 7/02/11) :
1) represents the top of the break out zone from 2010. We are currently revisiting this area.
2) val from the breakout. Mkt stalled here 3 times during the up and the subsequent down move.
3) poc level. was revisited two times from the top.
4) vah level. A move above this formed congestion because of the earlier excess.
Nifty daily bar (taken 7/02/11)
1) taken from the preceding monthly chart. Note the balance zone right above it on the left. We formed a similar one on the right.
2) taken from the weekly chart.
3) again taken from the weekly chart
4) again taken from the weekly chart
5) one time frame control from 6200 levels at the top.
6) the balance zone near the POC created excess at the top and broke to the downside.
Findings :
This morning the market is hesitating at the top of the bracket zone. Longer time frame sellers still in control of the market.
A break below would bring 5263, 5028, 4989 on the lower side.
On the weekly scale 5620 and 5720 will offer more resistance to an up move.
No long term view can be held till the previous excess at 6200 gets cleared.
We will keep reverting back to this chart for future reference.
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4 comments:
Very good analysis Shai!
Thanks Girish,
Fat bal profile developing intra day at prev known ref level.
Hi Shai,
As usual your posts amaze in their simplicity. Of little I know of MP, may I ask.
Monthly charts
a. what is and how you determine "4964 represents the fairest price for the move" point 4.
b. what determines "a one time frame market resulted from this breakout" point 6.
BB A standard axim is that when lower time frame levels kisses higher time frame levels, it is a good level to take contra trade. Here on daily chart the levels are kissing the levels of weekly / monthly. Wont you venture in contra long here ?
alphabet 1,
In the upmove from 2252 to 6338, the region around 4964 was the point at which buyers and sellers agreed most on value and hence a "fair value" trade.The monthly cycle gets a convincing breakdown below this level.
One time frame : value area high keeps getting exceeded or value low does not get broken for an uptrend and the reverse for a downtrend.Works in all timeframes.
I was long on friday at the close and booked out an avg 40 points. The mkt went from a normal day to a neutral one today, so we'll wait for more information.
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