23 Sep: The price is near a resistance line. The spread and volumes are not increasing which means that the resistance line will hold good. On this day, the price falls with wide spreads and high volume. This means determined selling effort by professionals.
24 Sep: The price continues to falls. The spread is narrower and the volume is also less when compared to the 23 Sep. This means that the professional selling pressure is reducing. This alerts us expect that the down move will end soon.
25 Sep NSE: The price opens in the direction of trend but recovers to close on the high of the day. Though one may argue that the volume is just average, actually it means that the selling pressure has almost disappeared. If price can close on high on average volumes, especially when there is selling in the background, this means that sellers is not selling into it.(In VSA, terminology, it seems as though its a shake-out. Others may call it a "key reversal bar" - but I not sure about it.)
25 Sep on BSE: Three continuous session of falling price on falling volumes. The spread is narrow, price closing on the high. Again, selling pressure is withering and you can expect the price to turn soon.
Bunny, you are on the spot with this interpreation of price/volume action.
Let me bring in the dimension of timeframe here.
If I visualise weekly chart using by drawing imaginary bar with last 4 bars, then 4 bars of prev week and 5 bars of week before that.
Then we see last week showing red WRB. week before that was green doji and, prev week another red WRB.
If you move to volume bars.. then both red weekly wrb will show higher volume and doji is with low volume.
So at it depends on timeframe of our interest. Yes, we see strength on 1 bar, and infact that was already shown on 25th. So if we trade intraday, the you are taking contrarian position against the bigger timeframe (weekly) which is showing WRB with high volumes.
With opening near 85 on friday, it was right in the support zone and it is obvious that professionals will not sell in support zone. I can see professionals still waiting for daytrader/swingtrader/novice trader from shorter TF to bring the price back to 100 level
and sell their position. Look at what happened to suzlon whenever it tried to touch 100 in an attempt to go up and it got the slap by red WRB..
chart is already lower Swing tops.. Down trendline is intact, weekly making red WRB, MA showing the directionion of side to down.... all these factors are indicating weakness to me on bigger TF. As per the strength of friday, it might might make another attempt to 100, but 95 is hurdle before that.
So till we have clear trading of few bars beyond 100 to 80 zone. it is going no where.
infact bigger picture is getting red and red.
Just expressing my analysis of the chart. We both can have different view and still be right in our analysis.
As a trader, how we trade this, that is more important then intellectual satisfaction that we get from deciphering the chart.
Happy Trading.
