Trading two Powerful Indicators - Supertrend and Volume profile

bank nifty banknifty indicators supertrend volumeprofile Apr 15, 2024

Trading requires application of Technical analysis methods. Two powerful indicators that we use are Supertrend combined with Volume profile to see big trader’s activity.

Elliott wave helps to understand maturity of trend, supertrend is a classic trend following method, and volume profile provides area of reversal or big players activity zone.

Nifty hourly chart:

As shown in the above chart, after forming a top near 22760 area prices reversed on the downside. We have also hinted in earlier research using Elliott wave – Neo wave that the up move is matured and should probably reverse on the downside.

Supertrend – The reversal as per Elliott wave was further confirmed when prices broke below hourly supertrend indicator and continued to sustain below that. This indicator uses Average true range concept to derive the levels. It suggests that there is significant move in the opposite direction and the trend has reversed. We can see a red line formation above the prices suggesting that as long as Nifty futures are trading below 22493 overall tone will remain bearish with sell on rise method.

Volume profile – This indicator helps to understand the area where big traders have created their positions. We can clearly see that 22600 (futures) is the major hurdle on upside as the volumes have been significant there and on downside 22100 (futures) is important support zone. So, this can be the zone of pause for the current down move.

In a nutshell, Nifty trend remains sell on rise unless we see close supertrend and any change in volume profile will further indicate if the big traders positions are now changing.

Thus, one can use this simple indicator to ride the trend, and especially options traders will have an upper edge over others when combining this technique of trend following along with Elliott wave – Neo wave techniques.

TRISHUL (Options Mantra + Elliott wave + Neo wave) – Learn the science of Trading using simple concepts of Volume profile, Supertrend, Price action, Keltner channel breakout, KST momentum indicator (5 Mantras of Options trading) scheduled on 27th – 28th April and combine with Elliott wave, Neo wave scheduled on 1st – 2nd June. Limited seats only, fill below form for more details: