Here's a price action analysis of Axis bank scrip. Below is the 5-minute chart of the same. Open candle is marked in the chart. Supply zone from day before yesterday's session is also marked from where huge selling had come. Bullish Flag is also drawn in the chart.
Coming to today's session, price opened Gap up and within 30 minutes into the session price had breached ceiling of the flag pattern. Price gave opportunity to enter buy trade just above the upper band of Flag channel.
Since there were too many hurdles, one could predict a limping move. 200-MA, pivot 'S1', PDH were the hurdles. Harami candle started the move up and price stalled near the supply zone marked in the chart.
Once price reached Supply zone, 'M' pattern formed in RSI which foretold immediate fall. Price fell back again by equivalent measure of morning rise.
Price attempted to move higher. But a confluence zone of PDH, 'r1', and previous day pivot 'p' arrested the attempt. Two downward facing red arrows show the zone of price arrest. At this time lot of small body candles formed. Small body candles show weakness and indecisiveness.
RSI too was near the upper band of bearish region near the selling opportunity area. Price couldn’t hold itself together and it fell down drastically for the rest of the day. In the process, price filled the morning gap completely.
I write all this in hindsight. Frankly, at both trade opportunities my mind was filled with 'what if' questions. I just couldn’t form a story at the time of opportunities. I must convince my mind strongly that there is risk inherent in every trade. Finding critical junctures in 5-minute chart and actions of novice traders will help. A background of higher time frame outlook is must.
What about Nifty 50 index?
Nifty 50 opened near previous day High and the open candle was a bearish candle. Please refer the 5-minute chart of Nifty 50 index below. Till 10:50 A.M. Nifty found stiff resistance near weekly pivot 'S1'.
But at 11:00 A.M., Nifty broke above 'S1'. From then on price meandered sideways till 2:00 P.M. after when Nifty started to fall drastically. I have marked important junctures by 1 - 5 numbers. Please find my story.
1 - First High of Nifty for the day after breaking above 'S1'
2 - Traders who saw Nifty above weekly pivot made some bargain entry here.
3 - Nifty moves back to the day high. But the move is filled with small body candles.
4 - Some more buyers entered here. Carefully note that the fall to this juncture in finished by big red candles.
5 - Nifty again tried to go higher and made a stop here with Hanging Man. This rise is also filled with small body candles.
1-3-5 top points coincide with RSI divergence. Once juncture 2 low was erased, bears were merry making in the market. Big sell off came. Please also note that I have drawn a wedge pattern. Any time price spills over from a wedge pattern it usually is a big movement. Nifty closed 0.50% lower for the day.