Here is a very interesting case of Axis Bank scrip for 4th May 2021.
The opening candle is big bullish candle shown by the arrow. This bullish candle touched R2 pivot level. Please see the 5-minute chart of Axis Bank scrip below.
After retracing nearly 50% of the opening candle, a Hammer-like candle appeared whose down wick is marked by the circle. I planned to go long and entered after the confirmation green candle. The Risk – Rewards ratio wasn’t great here as it was only 1: 1.5.
But for most part of the morning time the stock had lot of small candles and the scrip was facing resistance near R2 pivot level. A mild intensity Resistance zone marked grey box also stopped the price from further moving upside. Also the scrip couldn’t break Initial Balance High.
I closed the trade manually as shown. Later the price fell heavily towards center pivot level.
The decision to close the trade early must be based on the cues that change the premise of the trade set up. In this case many cues signaled the impending fall.
What about Nifty 50?
Nifty 50 index opened near a strong Resistance zone of 14680. The opening 10-minute candle is a shooting star as seen in the chart below.
The initial balance levels are marked here by the dashed blue line. At 2:00 p.m. lower blue line was breached and the Nifty headed southwards for the rest of the day.
14680 - 14700 levels acted as stiff resistance.