Volume at Price indicator provides very important support and resistance levels and helps in understanding the reversal areas. We applied this indicator on Nifty and it helped us to capture the recent down move. You can see the bounce back exactly from this indicator support levels.
Below is the research picked up from “The Financial Waves short term update” daily research report.
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Nifty daily chart:
Following is a part of research mentioned in the daily report published on 16th April morning before markets opened:
In previous update we mentioned that “Nifty touched our next target of 10470 and it is prudent to book partial profits at current levels for longs initiated near 10250 – 10280 levels. For remaining positions one can continue to follow trailing stop method”
US attack on Syria might result into short term volatility in global markets especially commodity. It is therefore important to see how prices behave after the opening move. In addition to this Infosys results can also lead to pressure on IT stocks. However, we have observed that during such events there is handful of stocks which manages to balance out the index and the sharp decline is averted. In the past as well when IT companies corrected sharply after result announcement there were other stocks that kept index buoyant.
As shown on Nifty daily chart, prices have now touched the upper end of the Bollinger bands and formed a DOJI candle in previous trading session. There can be some consolidation in the zone of 10350 – 10550 levels.
We are also showing Volume at price indicator. This is an excellent indicator that measures how much volume has gone in that specific price range. The peak can be seen near 10300 – 10350 zone. So this level will now act as a very important support. This is also the pivot low seen during the recent up move. Any dips near to this level will result into an upward thrust. So we will stay bullish as long as the zone of 10350 – 10300 remains protected.
In short, expect range bound movement between 10400 – 10550 levels as long as 10350 remains protected on downside.
The above research clearly shows how one can use a simple indicator for deriving the important levels and trade setup can be formed around that. Based on above one can form a strategy of going long near 10400 levels with just 50 points of stop at 10350 and expecting a target near 10550.
Happened: Nifty touched the high of 10557 in today’s session itself!
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