PRICE ACTION : No indicators, patterns and theories. Just price.

[traderniftybull]

hmmmm
bro, just be cautious,
if INFY does not revert in next 1-2 sessions

just a clarification (if not clear)
what I meant
INFY may revert in next 1-2 sessions.

 

[drvinod_k]

Point taken traderniftybull. We are just discussing view points. You have shared what you felt based on your observations. What I am trying to get at is the thought process that separates a bull from a bear or a person who would choose to stay away from the situation in case he is not clear or is waiting for a further confirmation wherein he is comfortable with risking his capital. I have been reading some stuff about Elliott wave analysis on this platform lately. I have tried to sum up INFY move as per Elliott wave analysis. I wish to state that I am an absolute novice as far as Elliott wave study is concerned so friends kindly correct me if I am wrong in my interpretation of the chart below. Elliott wave study is to add another perspective.

Regards.

 

[traderniftybull]

sorry friend
cant comment on EW, as my knowledge on EW is very basic, though I may understand it (as it is/in toto) but wont say that the numbering is correct or not.
BTW, I would have taken your point 5 as my point 3 and current fall as point 4. But since y'day fall entered in wave 1 territory (though with a very small margin), so it cant be wave 4 (point 4)

 

[drvinod_k]

Thank you for your observations. This is the first time I took a shot at EW. Already I find it too cumbersome and it certainly is not my cup of tea. My only objective was to add more perspective. Any other comments or suggestions regarding INFY are most welcome. A similar pattern was observed in Reliance futures EOD chart but it failed, and subsequent reversal took the prices from 1205 to 1285. Observations such as these are the reasons why I chose to study price action. Sharing Reliance future EOD chart below. From price action perspective I would like to add that the area at 1280-82 is important for me and Reliance trading below it will limit its up move.

Regards.

 

[RadhuK]

Already created a calender spread.

Problem is INFY is widely watched, everyone will have seen the classic H&S pattern
Probably retailers would have taken a short view
and smart money will be out there to suck them dry
Lets see how it pans out

 

[RadhuK]

there was inverse H&S also which played out.
Lets see this H&S play out

 

[drvinod_k]

Dear RadhuK thank you for your observation and inputs. We have another perspective now. It would be highly appreciated if you share your views and reasons for the calendar spread. I am sure all fellow boarders would be keen and equally grateful to add another strategy to their arsenal.

 

[RadhuK]

Dear RadhuK thank you for your observation and inputs. We have another perspective now. It would be highly appreciated if you share your views and reasons for the calendar spread. I am sure all fellow boarders would be keen and equally grateful to add another strategy to their arsenal.

As pattern implication, target is 670 or there abouts. Have shorted ATM call. And Infy moves down towards target swifty, Will book profit in this call and then short next available call on downside.. till target achieved. When it reverses, farmonth call will give some profit.
As I said, smart money will try to move things up. and/or their may be retest of the neckline. Next month call will take care of that. premium erosion will be less in far month call. Incase of upmove far month call will give profit even after shorted call becomes ATM, but will expire at March month end. and farmonth call can keep giving profit in up move.
In case, Infy consolidates around these levels. shorted call premium erosion will be quicker as compared to farmonth call and will give profit.
This is reason, why did not buy naked put. Unless there is swift down move. put will loose premium.
Future position is inherently risky, so not taken , higher taxes, charges not withstanding.
So have taken care of all possible scenarios.
Lets see how this pattern pans out, ofcourse adjustments will be done as per price action.

 

[drvinod_k]

Nicely summed up RadhuK you have gone with the obvious but smartly hedged for any potential contra move with the next series options contract. It conveys your clarity of thoughts and conviction. I am sure fellow boarders will be richer in experience with this startegy shared by you.

 

[drvinod_k]

As already discussed INFY future rates have ventured into 710-712 zone. As a price action trader I will look at this level with keen interest and wait for a closing below these levels. If these levels are respected and protected then a reversal is likely as per price action. If the fall continues then 688-90 should be the first target. I request everyone to first weigh in all their options just the way our friend RadhuK has done before initiating any trade or else observe and gather experience.

Regards.