Technical analysis is all about trying to find out the best fit or methods that are currently working in the markets. There are various methods from the basic support and resistance level identification to the complex patterns of Elliott wave and Time cycles. I believe in combining anything and everything that can help in increasing the trading accuracy.
Now look at the below chart of Nifty that shows important pivot levels. A pivot level is essentially the area which results into reversal by either acting as a support or as a resistance. In below chart, we have drawn many horizontal lines across different pivot levels. Break of this level result into movement towards the next level. So, one can form trading strategy around this simplistic but effective method.
Nifty hourly chart:
In above chart you can clearly see multiple levels. The key is to identify the resistance level and buy on break above that level. As the overall movement is from bottom left to the top right corner the trend will remain positive. So it is best to create buying strategy unless we see lower highs and lower lows below the first horizontal line.
As per this method breaking above 11780 – 11800 will indicate the resumption of the up move with important support being placed near 11550 levels. It is best to trade objectively and even simple methods like this can do the magic!
So, how to forecast using advanced methods when such simple methods are combined together? Subscribe to “The Financial Waves short term update” along with the “Momentum research report” and see the power of technical analysis. Get access here