Saturday, November 9, 2013

Nifty P&F (Wk 1111-1511) - 6100 a strong support

Recap:

Minor support @6100 proved quite strong.

Weekly Analysis:

Daily Analysis:


Summary:

Weekly pause, Daily down. Daily Channel support, Fib38 & previous resistance break-out, suggesting strong support @6100. Weekly pivot support has got more room till 6060.

The second leg will determine the whether correction is on or the failure of the break-out has trapped the bulls.

8 comments:

  1. Hi Rajib,
    Thank you very much for the free pnf excel sheet. I am also a pnf chartist. Will you please incorporate percent scaling(log scaling capability like 0.5%,1% and so on) to our excel sheet then it will be a much more powerful tool for small investors like me. Please mail me praveenp07@gmail.com. Once again thank you very much from the bottom of my heart for selflessly sharing the sheet and sharing your view point about nifty through this blog.
    Regards,
    praveen

    ReplyDelete
  2. @ Praveen,

    Thanks praveen for the appreciation.

    Never felt the need of logarithmic scaling. Definitely can do that. But it would motivate me further if you can explain how it's useful for charting specially when we are dealing with 2-3 years data.

    Regards,
    Rajib

    ReplyDelete
  3. Hi Rajib,
    Thank for the prompt reply and the question. Now let us take the example of On mobile global. In 2009 it had reached a peak of 337 and now it is trading around 26 to 27.Now we using our excel sheet we can have only fixed block size which will render this chart not worthy for analysis. If you can do the scaling in percentage terms you can see a clear price action. If we employ log scaling Trend lines will be much more useful than on fixed box scaling or arithmetic scaling.
    Please develop this feature and draw on mobile chart in both types of scaling and see the difference and see how effective the trend lines have become.
    Please try and see the value of log scaling once for the benefit of Pnf India community.
    Regards,
    praveen pentakota

    ReplyDelete
  4. Hi Rajib,
    Now i would like to explain the point we are discussing with the example of spot Nifty. At present you are sharing analysis with fixed box size of 15 and 40. Now during DEC,2011 nifty is around 4550 to 4700 range, now in 2013 we are around 6150 to 6300 range. If we do the analysis with Short term scale of 15 during Dec,2011 it will show less reversals,now with the same scaling if you do charting now it will show more reversals ....if we want to give uniform weight-age to scaling at different price levels it should be in relative terms like percentages (log scaling).
    Hope i have explained my point clearly.
    Regards,
    praveen

    ReplyDelete
  5. @ Praveen,

    Since my days of engineering, I've used log scaling only when the growth / decay is in multiple of some base number.

    The application of the same in my limited experience of trading is in fitting a trend-line to the rise / fall in the price. Therefore, I was quite surprised that you are able to apply this knowledge to your day-to-day trading!

    While I buy your point of Onmobile partially, I don't buy into your same point for Nifty! As 4550 to 6150 is merely 33% in 2 years! May be if you can show me with some pictures, my ignorance will get some light.

    Having said that, while I was thinking yesterday on the development. I'm finding logarithmic scaling in PnF chart is quite contrary to the fundamentals of the PnF charting. Because, a movement / reversal happens only when it moves by some fixed point, now when we put a percentage as box, everytime the base changes as per the CMP. While in a bar charting, only the scale changes, but the price do not change they remain in their position.

    Have you seen any place where PnF is being plotted on semi-log scale? Please share the link with me. I would like to study it more.

    Regards,
    Rajib

    ReplyDelete
    Replies
    1. Hi Rajib,
      In continuation to your point on nifty, i would like to explain my point further. My point is 15 point block size @4550 is 0.33%, as we are using 3 box reversal it will approximately representing 1% reversal. When nifty is @6150 15 point block size is 0.24% therefore 3 box reversal is around 0.7% as reversal. In the same way we can calculate for box size 40. When nifty is @ 4550 box size 40 is 0.88% making approx 2.7% as 3 box reversal, and nifty@ 6150 box size 40 is approximate 0.65% making it around 1.95% as 3 box reversal.
      According to me the core purpose of pnf charting is to eliminate market noise and higher reversal amount @higher levels and lower reversal amount@lower levels, but by employing fixed box scaling we are just doing the opposite. i will give you a link, where you can draw nifty in log scaling...
      http://stockcharts.com/def/servlet/SC.pnf?chart=$CNXN,PEPADANRBO[PA][D20131111][F1!3!1.0!!2!20]&pref=G
      Regarding your point
      " I'm finding logarithmic scaling in PnF chart is quite contrary to the fundamentals of the PnF charting. Because, a movement / reversal happens only when it moves by some fixed point, now when we put a percentage as box, everytime the base changes as per the CMP"
      My take on this point is it is not in contradiction with pnf philosophy,but it is completely in line with core pnf philosophy...according to me core pnf philosophy is to eliminate market noise and let the chartist see the price action in a clear and concise way. The fixed box scaling is popular because it don't need much computing power and it is easy to adapt for manual chartist. But when you are computerizing pnf chart it is better to go with log scaling. Regarding your point about taking CMP as base for %box size : In pnf after filling a box with an either X or O we are no way concerned with that Price point again. We will proceed to look at the next box. Like wise for log chart also previous box value will be the base not the CMP. For example last filled box is @ 100.08 with an X and we are making 1% log scale chart with 3 box reversal our sheet should check whether it can fill another X @ 101.08 or not? if it can not fill another box it should check whether it can fill 3 boxes down to reverse the column @97.13...
      The only inconvenience with log scale is the decimal will come as box sizes....
      But the advantage is Trend lines will be more powerful as a tool in log charting...
      Hope i have explained my point correctly...if you want to see more symbols in log charts send me an email to praveenp07@gmail.com
      Thank you for the nice discussion.
      Regards,
      praveen

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  6. @ Praveen,

    Well the link was good enough for me to see what you were asking for. It's not Logarithmic scaling, but simple % scaling. The good news is I've started working on it & soon will come up with the new release of the software.

    However, I'm yet not convinced how you are applying the same in your trading. You need to share the same with the P&F community. You can upload them somewhere in the web or can mail me at lochan79 at gmail.com & I'll share them through my blog.

    While I burn my midnight oil to develop the software, you teach me (us) how to apply them.

    Regards,
    Rajib

    ReplyDelete
    Replies
    1. Hi Rajib,
      Please develop the software and i will explain how to use them. It's application is same as traditional fixed point scaling charts.Please concentrate on the development of software, i will send you the application part to your mail id.
      By the way our excel sheet can down load data from yahoo only? Can it be configured to download data directly from NSE website?
      Thank you once again for the hard work you are putting into developing this tool.
      Regards,
      praveen

      Delete