Nifty has done 6 consecutive down close days and today if we close below the today's open and close of yesterday,it will be 7th consecutive day.. Historical data indicates that the market should reverse to upside ( and give atleast a rally ) in next 1-2 days.Previous corrections were 3-4 % and we have now done 3.5 % already from the top.
If the market does not reverse in next 2-3 days and sustain below 10150-10100 then we could be heading for a more prolonged and deeper correction than the earlier ones...now it is for the market to decide what it has in its mind. We should be ready for both the scenarios...
Smart_trade
Koi chakkar nahi hai bhai...but you observe any rally or decline after 6-7 days of continuous down move with consecutive down close days, the market becomes atleast short term oversold and reverses atleast in short term....plus 8th,9th or 10 th set up day the market makes atleast a short term low as per sequential....
Just statistical evidence....
Smart_trade
Pivots marked are ok but remember the following :
1) It is to be applied after a sustained down or up move for catching the reversal and on first two pivots only not on each and every pivot which come subsequently.
2) I have by experience found that if the two pivots are more than 6-7 bars apart then the accuracy goes down as the reversal has already played out and the move remaining is small...
Smart_trade
Sir, as after the formation of first pivot, we are expecting the formation of second pivot (evolving pivot), one will successively put an SL-M order below every 'expected' 'middlle' bar of an evolving pivot, as the entry has to be before the actual formation of second pivot.
Is that interpretation correct?
Vivek
I always trade like this...a bit aggressive though. Safer is let the second pivot form and then buy/ sell above/ below the third var which completed second pivot.But then the entry will be a bit late....in very rare cases the trade done in aggressive way becomes a false start but then the early entry it gives compensates for the false starts...
ST
And sir the SL and target or trail?
Vivek
Sir one doubt,
When catching reversals, suppose reversal of a sustained upmove, the second pivot high be lower than the first pivot high, no?
Vivek
Yes that is the basic condition.
ST
Something forming in NS 5m?
If you are asking for reversal to downside, the upmove is not even 1.5 days old....so dont look for downside reversal so soon. The downmove will be a correction today.Most likely we will end the session higher.
ST
sir, when u get time can u elaborate little more pls on" second pivot high be lower than the first pivot high" - usually higher pivots are preferred isn't it?
thanks
phoenixbird
When one is trading reversal then first pivot is kind of top, second pivot is a bit lower secondary top.
Vivek
