If you have been following profile charts, for the past few weeks you may have noticed that value has been going sideways for a few weeks now.
To illustrate the activity of the Nifty further, I picked up some bar charts and did some good old fashioned trendline analysis.
Have a look :
The chart is a 30 minute bar chart of the Nifty future for the past 30 days.
6097 and 5730 represent the extreme ends of the bracket we currently find ourselves in. Within this channel I have introduced two light blue horizontal lines ( on the right ) which define the path from the lows to a possible top of the bracket, the Nifty future took through the current week.
Also included are two heat maps based on volume profile.The larger heat map on the left is for the entire duration of the current bracket ( 6097-5730) and the one on the right is for the last 5 days of activity.
The black in the heat maps represent zones of low volume activity with the color gradient going to blue, green, yellow and red as the volume increases.This option helps us to get a visual display of high and low volume areas.
As you can see the extreme ends of the bracket ( black zone) have been quickly rejected and price hasn’t spent a lot of time there, whereas the middle ( red/ yellow) is where the market has auctioned most of the time neat the 5950 zone.
So whilst we are within the blue channel, we are looking for signs to see if there may emerge a breakout based on the last five days of activity.
Unfortunately we can see a replica of the past 30 days in the last 5 days of data.
The red and yellow in the past week are exactly where they were in the past one month.
So the inference is that the sideways range in the Nifty would continue.
This market is an option writer’s delight.