Technical analysis is all about trying to find out the best
fit or methods that are currently working in the markets. There are various
methods from the basic support and resistance level identification to the
complex patterns of Elliott wave and Time cycles. I believe in combining
anything and everything that can help in increasing the trading accuracy.
Now look at the below chart of Nifty that shows important
pivot levels. A pivot level is essentially the area which results into reversal
by either acting as a support or as a resistance. In below chart, we have drawn
many horizontal lines across different pivot levels. Break of this level result
into movement towards the next level. So, one can form trading strategy around
this simplistic but effective method.
Nifty hourly chart:
In above chart you can clearly see multiple levels. The key
is to identify the resistance level and buy on break above that level. As the
overall movement is from bottom left to the top right corner the trend will
remain positive. So it is best to create buying strategy unless we see lower
highs and lower lows below the first horizontal line.
As per this method breaking above 11780 – 11800 will
indicate the resumption of the up move with important support being placed near
11550 levels. It is best to trade objectively and even simple methods like this
can do the magic!
So, how to forecast using advanced methods when such simple
methods are combined together? Subscribe to “The Financial Waves short term update” along with the “Momentum research report” and see the
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