India's NIFTY INDEX - Near the top formation from 8300-8640 - Look for downside to 8000-7800.
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 candlestick traders will label today a bearish "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.
5-EASY-STEPS.
Tim
Trade closed: target reached
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I saw a comment on this chart and realized I hadn't closed it yet after it reached the target. Time for a fresh look!
Comments
TomProTrader
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This index is far from Nifty now...
Imprimus
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Hi Tim,
Can you please post your latest analysis on NIFTY ?
Thank you.
A-shot
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double that
timwest
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It looks like a bottom is forming due to a number of reasons I can see on the retest of the base. I see range-expansions failing to follow through and I see reversal and exhaustion signs. I will look closer and see what I can determine for an entry. I'd suggest that averaging into any position over 3-5 days would be the best way to go in most markets to keep the initial risk lower.
A-shot
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It indeed has a level where 2 shoulders were, so i was indeed wondering if you see signs of reversal. thanx for the update
B120626
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Tim's YouTube video kinda explains Time At Mode. youtube.com/watch?v=4Sylo9HopV0 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.
timwest
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Nice summary. 5 bars is the minimum amount of time that I'm willing to call a "trend". I have found that 8-12 bars is a decent number of bars to have at one price to set up a great trade.