NSE Nifty - New Intermediate Uptrend
The Nifty finnaly confirms the beginning a new intermediate uptrend by closing above its previous intermediate swing high (top) of 1626.00
This along with the final arrival of the monsoons could possibly trigger a new bull market which I am sure we are all awaiting.
After making a panic bottom of 1292.00 the Nifty has been consolidating between 1440 and 1626 ( which is also the top formed after the panic fall).
This consolidation has been going on for over 10 weeks. So a breakout of this consolidation should be good news for all trend traders and investors.
Consolidation: A generally lateral period of trading in terms of price. It is usually an interruption of an ongoing uptrend or downtrend, as opposed to a reversal type of pattern.
A term used mainly by technical analysts to refer to the movement of a stock's price within a well-defined pattern or barrier of trading levels.
The levels of resistance and support within the consolidation are created through the upper and lower bounds of the stock's price.
Congestion is usually referred to as a series of trading days in which no significant change in price occurs. Consolidation is a congestion period that is most like a pause that allows market participants to re-evaluate the market and the environment which leads market price. Upon a breakout of a congested period, a build up of orders outside of the congested area may add to the size of the breakout move. Resolution to a period of indecision or congestion often leads to a run in prices of various sizes. This is in fact a breakout of a congested period. It is important to examine periods of lower volatility when prices become congested in order to determine what may be a trigger point for prices breaking out of a congested area. Trendlines are often used to help identify the trading ranges and may upon penetration, become an early warning that a breakout may be in process. The longer the period of congestion, the more possibility there is for a build up of orders and thus a larger potential surge in volume on a breakout.
Now to get down to the business of stock selection.
See attached chart for a visual analysis of the consolidation and breakout.
The Nifty finnaly confirms the beginning a new intermediate uptrend by closing above its previous intermediate swing high (top) of 1626.00
This along with the final arrival of the monsoons could possibly trigger a new bull market which I am sure we are all awaiting.
After making a panic bottom of 1292.00 the Nifty has been consolidating between 1440 and 1626 ( which is also the top formed after the panic fall).
This consolidation has been going on for over 10 weeks. So a breakout of this consolidation should be good news for all trend traders and investors.
Consolidation: A generally lateral period of trading in terms of price. It is usually an interruption of an ongoing uptrend or downtrend, as opposed to a reversal type of pattern.
A term used mainly by technical analysts to refer to the movement of a stock's price within a well-defined pattern or barrier of trading levels.
The levels of resistance and support within the consolidation are created through the upper and lower bounds of the stock's price.
Congestion is usually referred to as a series of trading days in which no significant change in price occurs. Consolidation is a congestion period that is most like a pause that allows market participants to re-evaluate the market and the environment which leads market price. Upon a breakout of a congested period, a build up of orders outside of the congested area may add to the size of the breakout move. Resolution to a period of indecision or congestion often leads to a run in prices of various sizes. This is in fact a breakout of a congested period. It is important to examine periods of lower volatility when prices become congested in order to determine what may be a trigger point for prices breaking out of a congested area. Trendlines are often used to help identify the trading ranges and may upon penetration, become an early warning that a breakout may be in process. The longer the period of congestion, the more possibility there is for a build up of orders and thus a larger potential surge in volume on a breakout.
Now to get down to the business of stock selection.
See attached chart for a visual analysis of the consolidation and breakout.
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