MARKET WORK’S ON PERCEPTION OF TRADERS, AND THAT’S WHY WE SAY MARKET IS A STUDY OF HUMAN PSYCHOLOGY THROUGH DIFFERENT MEANS – CHARTING IS ONE OF THE TOOL OF THIS STUDY.
WHEN YOU TRADE WITH YOUR PERCEPTION – REMEMBER ONE THING FOR EVERY BUYER THERE IS A SELLER IN MARKET, SO IF YOU THINK THAT YOUR PERCEPTION IS RIGHT ABOUT MARKET THEN WHAT ABOUT OTHERS AND THEIR PERCEPTION????
SO ULTIMATELY “WHEN YOU TRADE IN A MARKET, BETTER TO STUDY THE OTHER TRADER PSYCHOLOGY THAN YOUR PERCEPTION” IT’S SIMPLY BECAUSE EVEN A FAMOUS DOCTOR CAN NOT TREAT HIM SELF PROPERLY, BECAUSE HE IS MORE WORRIED FOR HIMSELF.
LIKEWISE REMEMBER ONE THING MARKET NOT WORK ON YOUR PERCEPTION, IT’S A COLLECTIVE OUTPUT OF PSYCHOLOGY OF MAJORITY OF TRADERS – SO THINKING YOURSELF SMART IS NOT A SMARTNESS, BUT CHALLENGING OTHERS SMARTNESS WILL ULTIMATLY DEVELOP SMARTNESS IN YOU.
In our last week report of nifty we clearly mention that any green close near 6100-6150 range then we can see upper level with small stop loss in this range and see nifty able to made 6285 level from 6129, which is almost 156 points jump from support. Also mention that fresh selling will be below 6100 level, which market able to sustain last week.
With the present chart development we can see few things on chart.
As we can see nifty taken support on trend line which is drawn from 3 support points on chart, and same time support line drawn on RSI also, which only able to include 2 points.
So this indicate that, price taken support and RSI still not able to come down as price fallen from top, so it’s kind of “POSITIVE DIVERGENCE” on chart.
Observe the 2nd trend line on chart, which consist two recent bottom, and price trading mile away from this trendline support, but interestingly observe rsi with respect with this 2nd trend line. Here rsi shown weakness by coming down to the support level, but hence price not able to catch any weakness on chart, as it not even broken the 1st trendline support.
As we say in technical that “PRICE IS THE KING” so while putting any indicator or any study we need to give 1st preference to price chart only. So as per this rule, we want to say that, even if rsi gone below support but price not shown any sign of weakness it’s again a kind of internal “DIVERGENCE” between two factor’s, and in such case we give preference to price chart only.
Even as per candlestick patterns, last week market given “BEARISH OUTSIDE BAR” candle, then it given “BULLISH ENGULFING” candle next day, and after that it given “DARK CLOUD COVER” candle on chart, so it fail to confirm all bearish patterns and given a higher close for the week which give some confirmation of bull entry in a market.
Our overall intention is, we wanted to show you that why this bounce was taken by market last week.
now with the current chart development again we can say that market still have support in 6100-6150 range only, and till this support is sustain, we can’t look for any positional sell for bigger targets.
Overall levels to concern for the week are support levels at 6150-6100 if levels sustain then upside to expect 6350-6450-6550 levels in coming days. One can thing for positional sell at more higher levels or below support only.