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The author is a SEBI Registered Research Analyst (INH000004796) and a NISM certificate holder in Equity Derivatives Market. The certification is provided by National Institute of Securities Markets.

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Saturday, January 04, 2014

Median getting converted into MSP






Here I try to show how whenever there is a Median formation due a big day for the Nifty, it usually gets converted into a MSP for future trading sessions.

In the first exhibit, the previous day( 18th Dec 13) was a big day for Nifty and thus it had a median at 6207.
On 19th Dec 13 we had a BOF PDC and Nifty had a vertical fall. At around 2:20-2:30, the prices started flirting with previous day median (PDM). Finally we had a BOF and Nifty started drifting lower.

In the second exhibit, on 20th Dec 1 Nifty opened near PDC and rallied. At around 11: 40-11:45, the Nifty broke PDM and tested it only to rally further. At this point the PDM gets converted into MSP.

The big day of 19th Dec 13 made a median at 6232. On 20th Dec we already saw how the Median on 6207 became MSP. On the same day after rallying past that point of 6207 prices went past 6232 for a bit and tested it, which was the PDM(for 19th Dec). Nifty rallied from 6232 and went till 6250 and again retreated to test 6232 to rally further to form HOD at BRN. Again the PDM of 6232 gets converted into MSP.

The third exhibit is a club of both the days.

I urge traders to keep a close eye on the median of a big day for Nifty. More often that not that point/zone gets tested before moving on and in due course forming a MSP.

14 comments:

  1. TBP

    Interesting. Will keep a watch
    I have linked the post
    Thanks

    ST

    ReplyDelete
    Replies
    1. Hi ST,
      Thanks for taking time out, reading and commenting..

      TBP

      Delete
    2. ST,

      Thanks for linking the post.

      TBP

      Delete
  2. Hello TBP,
    How U calculate These median points.
    Any formula or observation only.
    kindly Elaborate.

    ReplyDelete
    Replies
    1. INDITRADER,

      There is no calculation as such.
      Conventional charting tools should provide the median provided there is a big day for Nifty.( Intraday HL swing of 80-100 points or more)

      Thanks for the visit and comment,

      TBP

      Delete
  3. Hello TBP
    Can we say ATP as Median?

    ReplyDelete
    Replies
    1. TC Wear,

      ATP is a feature which changes as the order flow changes.
      Here I was referring to a price point which gets created as a result of the formation of a candle.
      All EOD candles will not form Median.
      If a Doji or a spinning top or a Pin bar or any other indecisive candle is formed then there will not be formation of Median for that day. In that case the previous median will still hold true.
      Any TA software should give you the value of Median if at all it forms due to a big day in Nifty

      Hope this clarifies.

      Thanks,
      TBP

      Delete
  4. @ TBP ,

    median means ......PDH and PDL difference divide by 2 is it ?

    not getting point ......please explore more ..

    thank you

    ReplyDelete
  5. goodidea.vishal
    Not aware of any such formula.
    i think all TA S/Ws should provide daily median values.

    TBP

    ReplyDelete
    Replies
    1. Hello TBP ...
      Kindly specify any name of TA SW which you use or knows is available for getting median line values

      Regards ...

      Delete
  6. ONLY TARGETS
    I use Profision Pro by Precision technicals
    I am sorry, I am not aware of any formula to calculate Median

    TBP

    ReplyDelete
    Replies
    1. Thanks TBP ...
      I will get this SW by evening ... will you plz let me know the name of the indicator or the method you use to get median line price ?

      Delete
  7. thank you for the post. Is it fair to say that once price makes a swing high, only after that a.level is tagged as msp. Correct?

    ReplyDelete
  8. Anon
    That is the prerequisite. Only after a formation of a swing high or low and subsequent price action can we say that a MSP is going to b formed or not!!.

    Hope this helps
    TBP

    ReplyDelete