Here are some Pnf Charts of the Nifty and the bank Nifty of today and the volumes for the reversals taking place.
We like to look at the pnf charts as reversal tools and the larger studies around price objectives and patterns is largely ignored.
There are 3 panes, the first one for price, the second is for the volumes behind the price movements and the lowermost is the effective volume of all prices.
Auction theory gave us a two way auction today and a balanced profile between buyers and sellers.
It’s two way markets of today which tell us to have a closer look at volume information and the pnf charts are another way of looking inside the candle.
In the early part of the day as NF was sliding towards it’s lows, there was effective buying happening ( 3rd pane) which discounted the possibility of a slide lower.Eventually the market got up.However as the market tried to move higher in the last 30 mins of trade, notice the red candles in the bottom most pane which should be on watch tomorrow for continuation.
In the BankNifty also, the big green candles of the second pane are met with red below and vice versa.
Effectively speaking selling was met with buying and buying with selling, and the resultant was a range bound day.
