I log here my evening thoughts what transpired in Axis Bank scrip in today's trading session. There are many lessons. Below is the 5-minute chart of Axis Bank scrip for reference purpose.
Lets' dissect the chart. First and foremost, if we are
planning to trade any scrip, we must thoroughly analyze and understand the
price action of previous two or three sessions. In the above case, Axis meandered
sideways for most part of the day during the last session.
Interestingly, during yesterday's session, 707.5 Support morphed into Resistance. This metamorphosis is marked in the chart. In the process, 707.5 level Resistance had been stiff yesterday.
Coming to today's session, price opened with a huge bearish candle marked in the chart and engulfed almost 90% of yesterday's price action. In the process, price fell below previous session Low.
For some time, there were small candles hanging up to the Previous Session Low marked by small circle. Thereafter, price kept inching lower for the rest of the day.
A Flat pattern is marked in the chart for study purpose. Observe the RSI action during the unfolding time of Flat. For a tiny 'a' wave rise RSI bounced unusually. Also, when RSI falls to 25 and retraces to 40 levels to find resistance, one can plan to short. For a tiny 'c' wave rise as well RSI bounced unusually. In the process, a clean NR also formed.
Another important point to observe in the chart is that any time a weekly pivot is near the vicinity of the price and there are strong confirmations price moving its direction, one can plan trade keeping the Weekly Pivots as target. From the analysis of higher time frame chart, one could identify significant support zone near 685-680 levels.
What about Nifty 50 index?
Nifty 50 index opened little above the previous session close and continued to slide down right from the start. Please refer the 5-minute chart below.
The horizontal box drawn in the chart shows the confluence of previous session low and previous weekly pivot 'S2'. Once Nifty took off this confluence level, it inched lower for the rest of the day.
Early into the session, there was a beautiful opportunity to go short with favorable Risk-Rewards ratio. To fix the target, one could analyze higher time frame for significant support zones from earlier sessions.