The NIFTY Index chart has a remarkable similarity to the US stock market chart. The recent rally from the early September lows has nearly reached the top formation from July - August from the 8300-8640 level and it looks like the downside will be tested in the coming days and weeks.
I put several short entries in here and I don't follow this market day-to-day, but maybe I will now.
One of the rationale's is that the TIME AT MODE upside target reached and time expired. Now we see prices under a previous day's trading range. Some traders will label today a "engulfing" pattern where you see a gap up above the previous bar's range, and then a close under the previous bar's low. Class signal, but you need to see confirmation and lower prices to make sure.
If prices go over today's high, then look for 8400-8520 to find resistance and new levels to sell short against. Sell breaking under a previous bar's low (at least hourly) so you aren't trying to guess or trying to pick the top. Sell weakness. It is counter-intuitive, but it protects you from yourself and your ego's need to be right.
Send me a message and look at my other charts so you can see how the "building blocks" method I call "TIME AT MODE" works. Essentially, it's about 5 easy steps.
1. Start a trend anytime the market has made a new high or new low over 5 bars.
2. If a new high, start the trend from the low.
3. Count the # of bars at the most frequent trading price.
4. Once prices are above the mode for an entire session, use the range of trading around the mode as your measuring stick. Count the # of bars at the mode and use that for your timing tool. Project the price range up or down FROM THE MODE. Count day #1 as the day that either "range expands away" from the mode, or spends an entire session above the mode (for an uptrend, or below the mode for a downtrend).
5. When the price target is reached, exit or use a trailing stop to your liking. When time expires, exit or use a trailing stop to your liking.
I joke using kinda because the sound is rough, but the concept is there.
To me, time at mode is a method of estimating how strong a level of support or resistance will be when it is revisited in the future.
For example, if price spends 5 days at $100, then price drops to $95 for 2 days, when it tries to move back up to $100, it will probably meet strong resistance because it spent more time at that price level, and there are probably holders who bought when it was at $100, and are caught in the red when price dropped to $95, therefore waiting to sell at $100. In reality, 5 days may not be a longer enough time at mode, but it really depends on the underlying instrument and it's avg true range.