Here's a price action account of a banking stock named Axis Bank. Below is the 5-minute chart of the same. Scanning yesterday's price action we can see that the price had trended higher throughout the day. Today, price opened Gap up with a bearish candle near 'r1'. Please refer the chart below.
First half of the day, price was range bound between pivots 'r1' and 'R1'. When price hit 'R1' second time a spring candle manifested. Frankly speaking I expected the sideways action to continue for the rest of the day. But the price shot up in second half of the day to move higher.
Were there clues for a trader?
Yes. At 13:35 P.M. price took off pivot 'r1' and moved higher to kiss a strong supply zone from earlier session. In fact, a careful observer had all the clues. In the hindsight I see that when price was range bound, it hit the support 4 times and resistance 2 times. The interpretation could be that price had strong support at the lower band that is 'R1'. In addition to that, weekly pivot support is significant clue. Spring candle was also a strong signal.
What about Nifty 50 index?
Nifty 50 opened Gap up by 135 points. The broader index was well above the averages at the time of open. Nifty 50 had trended yesterday. Continuing on the bullish sentiment Nifty opened Gap up. Please refer the 5-minute char below.
Once
Nifty reached 'r2' pivot, it meandered around for some time and started taking
support at 'r2'. The arrow marks show the point of support being taken by Nifty
50. Also note that RSI was taking support at mid-50 level. Nifty continued its
upward journey by another 65 points. Nifty closed 1.71% higher.