The very first 30 minutes of trade were enough to give us an indication that this was a day which would be different from the ones we had seen last week.
After a few neutral extreme days back to back dominated by sellers, the markets put in a non trend day today moving within a range and generally splitting honors between buyers and sellers.
Sellers were unable to pin price below Value area Low of 5638 and buyers made an unsuccessful attempt of a range extension earlier in the afternoon.
The result was a balanced profile and a close at the developing point of control.
The chart above is that of the Nifty Future with two profiles-the one on the left is the composite profile for last week and the smaller one is the profile for today.
Both of them are forming bell shaped curves, indicating balance coming back to the markets.Whilst this does not discount the possibility of another sharp spike lower, today’s action does indicate exhaustion of the dominant trend.
If the market needs to go down , it would be new sellers who will have to enter to bring it lower, but any good upmove will put 5745 and 5815-30 back in play.
I had a question over the weekend about the utility of our smaller Trend Indicator especially after the big show by the blue-red Trend Indicator over the past several days.
The Green-Pink Trend indicator is there for a purpose and it’s utility was seen today in a range bound day.
Have a look :
Green is for buying and pink is for reversing.
There were over 8 trades, each yielding over 20 points in the Nifty Future.
In the days of 200 point moves, 20 point moves look small but can still be lucrative!