Nifty and Bank Nifty had been inching higher but
the momentum has been very slow and it has been hitting the wall zone!
Below
chart shows the multiple red trendline that meet at the same intersection. Multiple
trendline intersections are very important areas and one need to keep a close
watch on price behaviour from there. A decisive break above the intersection
zone will be bullish whereas move back below the support area will indicate
prices got rejected at higher levels.
Nifty 60 minutes chart:
Average True Value (ATR) is a classic tool to measure the overall daily
range of the market. ATR is calculated by taking difference between the highs
and the lows, today’s high compared to previous close, today’s low compared to
previous close and taking the average over the period of time. 10 days ATR
value of Nifty has cooled off from 200 points to nearly 118 points now. This is
classical indication that option buyers need to be cautious and markets might
start consolidation or non trending behaviour. So,
buyers will have to consider buying in the money options else there will be
deterioration in the prices despite of the market moving in expected direction.
The
sharp fall in ATR can be seen from the above chart which has now reached
towards the nominal value.
In a
nutshell, one needs to combine various methods together to form trading
strategy. Above chart shows, Elliott wave counts, Trendlines, Channels, Average
True Range (ATR) and Moving averages. It will now be important to see if prices
can manage to break above the earlier highs to generate necessary momentum for
further positivity or start giving up from here trapping the buyers! It is time
to be alert and not complacent. Next few days will be extremely crucial.
Get
access to the daily research on Nifty and stocks and see yourself the important
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