NSE Index Chart Technical Analysis Based On Price Action
Here’s what trader Vijay, one of the regular visitors to this website said in a comment and since I’m having difficulty attaching the chart to coments as well, I have created a new post to answer a few questions as well as give my opinions.
Here’s what Vijay said:
again the same chart
Market has done nothing from the last we talk.
But now we are at a crucial juncture.
It has broken the long term trendline
So we it get BOUNCE HERE it will be caped by the trendline it has broken . So what we will have is the only way and it is down
again the chart is not attaching . I am attaching to your mail
Your view. Please check your mail also for chart if time permits
Here’s my Opinion:
(1) note the support level. Price has not closed below it yet. But the fact that price has broken the rising trendline means that bears are taking over and the likelyhood is that this support level will be broken sometime soon. If any candle closes below that support level, the likely hood of more selling coming in and pushing price down will be great. So you can trade that initial BREAKOUT of support if you want. For my case, I’d prefer not to trade the initial breakout but wait for a retrace. Which simply means wait for price to get back up to test that broken support level and then look for bearish candles to sell. The risk is that price may not move up and you may miss taking a sell trade from the very beginning of a big downward move.
(2) then note also falling trendline. Price can bounce from the support level and go up to it and head down, break the support level and keep going down. Or price can break the support level first then later head up to this falling trendline and bounce down from it. So in both cases, look for bearish reversal candlesticks to sell.
(3) price may also head up and test the broken trendline. Need to watch that as well. If it does, same thing, watch for bearish reversal candleticks to sell.
NSE Index Chart Aftermath
This chart was again sent by Vijay. As you can see how price responded.