Year: 2011

We had a dull day in the markets today in terms of movement, but rather an eventful one in the trading room where we caught up on the importance of balanced profiles.

It’s the dull boring days in the market, which make a profiler sit up and take and even more closer look at the market action, because the market is always sending a message when it is open !

So I chuckled to myself again this afternoon when the lacklustre moves of the market were attributed to the holidays amongst other things. It was in the same Holiday period,6 sessions back, that the market had put in over 220 points straight.

If you had caught my last post made on the 23rd of Dec posted here, then you would have caught a bulk of the action as the post clearly had said, ” there is a clear accumulation of volume at 6000 levels which would give rise to the possibility of a directional move coming from these levels”.

Let’s have a look at some charts to test the theory further.

We follow price profile charts and are always looking for profile shapes which look like a bell kept sideways. These are what we call bell shaped profiles.

The green rectangles in the chart are all examples of balanced profiles.The POC is generally at the centre of such profiles and gives excellent directional moves from there.

All important levels are marked in the chart and one should use the levels to get in or out of positions.

Let’s look at the Bank Nifty :

Again the green rectangles give you the balance of the market.

The Balanced profile always indicate that the market has reached an agreement between buyers and sellers and the market is priced currently at fair value.

The market may choose to remain in balance for periods ranging from a few hours to a couple of sessions, But the break away from the zone is the one you can trust and take a call.

Now before you ask me after looking at my title ” which way?”, let me honestly tell you that I do not know.There can be a move to 6255 or 6120 immediately from here, but again a 50 % possibility in terms of direction.

The balanced profile tells me that the market is balanced without a bias,hence you have to be balanced without a bias

Always follow the message of the market.

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One more directional move ahead