Monthly Key Reversal

Though a key reversal is found on High-Low-Close formation bars across time frames, it attains more significance when we look for it on a monthly time frame. And just like any other large reversal patterns, location is quite important for a KR. The KR formation is a bit rare. But then more rare a reversal formation, higher it’s workability. The KR does not happen anywhere and everywhere. And because it’s not that common also makes it useful. KR is not your everyday reversal signature. So what is the monthly KR formation? This is a trend reversal formation. An uptrend exhaustion after a multi month trend could see a KR. In an uptrend, if markets make a new high, a higher high and then markets close below the previous close, a negative KR is formed. The idea is simple, the bull energy has been capped. Similarly if markets make a new multi month low, a lower low and then the markets close above the previous close, a positive KR is formed.
 
Even among KR’s there can be varying potency. Heavier down volume, deeper close compared to the previous close, KR at key resistances can add reversal strength to the formation. A KR on monthly is stronger than a KR on weekly prices and so on. A KR after a 9 months trend is more significant than after a few months of trend.
A simple look around and one can see that the current highs…
For more such interesting updates visit the Reuters Store or mail us for subscription details.
Jiseki Interpretation. Signals are interpreted as crossovers between various Jiseki Cycles. All three Jiseki cycles (Jiseki 1,2 and 3) depict different time frames. Example: An asset is ranked above 80 percentile and all the three Jiseki cycles are pointing lower, this suggests a running SHORT SIGNAL. Our Jiseki Indices use different kind of exits based on price and Jiseki Cycles. We have color coded the (Jiseki 1>Jiseki 2) SHORT zones with brown sandy (burlywood) and grey (Jiseki 1>Jiseki2) for LONG SIGNALS.
Coverage India: CNX100, BSE500 traded stocks and Indian Indices.

Michesan Anna-Maria, discovered her interest of markets immediately after completing her graduate studies in Economics. She followed it up with post graduate studies in corporate finance. A host of research work in behavioral finance, option strategies and quantifying market sentiment followed. Anna covers Indian equity and combines Elliott, Time Fractals and Time Analytics to deliver accuracy across time frames.