Saturday, June 7, 2025

Nifty 50 Trade set up on 9.5.25 Wyckoff analysis

 Wyckoff Method Analysis on 15-Minute Timeframe 



Since the daily chart indicated a potential distribution phase (upthrust at 25,029.50 within the “Sell Zone”), I’ll zoom into the 15-minute timeframe to analyze the price action on June 6, 2025, and identify Wyckoff phases, incorporating VWAP for confirmation.


Step 1: Determine the Trend

Daily Trend: Bullish, as the price is above all EMAs, and the last daily candle closed at 25,003.05.

15-Minute Trend: On a 15-minute chart, the trend on June 6 would likely show a series of higher highs and higher lows leading up to the high of 25,029.50, followed by a small-bodied candle with a long upper wick (indicating rejection at resistance). The trend may have shifted to consolidation or a potential reversal due to the upthrust.

VWAP Context:

 On a 15-minute chart, the VWAP would reset at the start of the trading session (e.g., 9:15 AM IST on June 9).  The VWAP would likely be below the closing price of 25,003.05, as the index rallied 1.02% during the day. Let’s assume the VWAP settled around 24,900–24,950 by the end of the session, given the volume-weighted average of intraday trades.

Conclusion: The 15-minute trend on June 6 was bullish but likely entered a consolidation or distribution phase near the end of the session, as the price hit the “Sell Zone” (25,104.13–25,210.00) and showed rejection.


Step 2: 

Identify the Phase

Let’s break down the 15-minute price action on June 6 to identify Wyckoff phases, focusing on the last few hours leading to the close at 25,003.05.

Hypothesis 1: 

Distribution Phase

The daily chart suggested a distribution phase with an upthrust at 25,029.50. On a 15-minute timeframe, this phase would be more granular.

Phase A (Stopping the Uptrend):

Preliminary Supply (PSY): Early in the session (e.g., around 10:00–11:00 AM on June 6), the Nifty 50 likely rallied toward 24,963 (R1) with increasing volume, indicating potential institutional selling.

Buying Climax (BC): 

The high of 25,029.50, likely reached late in the session (e.g., 2:00–3:00 PM), marks a BC. On a 15-minute chart, this would appear as a sharp spike with high volume, followed by a small-bodied candle with a long upper wick, indicating rejection.

Automatic Reaction (AR):

 After the high of 25,029.50, the price likely pulled back to 25,003.05 (the close), showing selling pressure.

Secondary Test (ST): 

In the last hour (e.g., 2:30–3:30 PM), the price may have attempted to retest 25,029.50 but failed, closing at 25,003.05 with lower volume, indicating weaker demand.


Phase B (Building the Cause):

Throughout the day, the price likely traded in a range between 24,963 and 25,029.50. High volume on rallies (e.g., around 25,029.50) suggests institutional selling into retail buying.

The “Sell Zone” at 25,104.13–25,210.00 aligns with the high, confirming resistance.

Phase C (Upthrust or Upthrust After Distribution, UTAD):

The high of 25,029.50, within the “Sell Zone,” is an upthrust. On a 15-minute chart, this would be a sharp move up with high volume, followed by a quick reversal, trapping late buyers.The long upper wick on the daily candle supports this, and on a 15-minute chart, this would likely be a single candle or a cluster of candles showing rejection.

Phase D (Test and Confirmation):

A Sign of Weakness (SOW) would occur if the price breaks below 25,003.05 or 24,963 on the next trading session (June 9, 2025) with high volume, confirming distribution.A rally back to 25,000–25,003 (Last Point of Supply, LPSY) on low volume would signal weak demand, setting up a potential short.Phase 


E (Markdown):

A breakdown below 24,963 could target 24,797.74 (Buy Zone) or 24,605.90 (S1) in the next session.VWAP Analysis for Distribution:If the VWAP is around 24,900–24,950, the price at 25,003.05 is trading at a premium to the VWAP, indicating overbought conditions.The rejection at 25,029.50 (above VWAP) with high volume suggests institutional selling, as the price couldn’t sustain above the VWAP premium.Evidence Supporting Distribution:High volume at 25,029.50 with a small body and upper wick suggests selling pressure.The “Sell Zone” at 25,104.13–25,210.00 aligns with the high, indicating resistance.The price is above the VWAP, and the rejection at the high suggests overbought conditions.


Hypothesis 2: 

Accumulation Phase

Alternatively, the 15-minute chart could show an accumulation phase, especially if the price consolidates after the rally.Phase A (Stopping the Downtrend):Preliminary Support (PS): Early in the session (e.g., 9:15–10:00 AM), the price may have dipped to 24,750 (near the prior close) with high volume, suggesting institutional buying.

Selling Climax (SC): A low around 24,750 marks a potential SC.

Automatic Rally (AR): 

A rally to 24,963 followed, indicating short covering.Secondary Test (ST): A retest of 24,750–24,797 later in the session with lower volume confirms reduced selling pressure.

Phase B (Building the Cause):

The price likely traded in a range between 24,797.74 (Buy Zone) and 24,963, with high volume on dips indicating buying.The “Buy Zone” at 24,797.74 supports accumulation.

Phase C (Spring or Shakeout):

A potential spring may have occurred mid-session (e.g., 11:00 AM–12:00 PM) if the price briefly dipped below 24,797.74 before recovering, with low volume on the dip.

Phase D (Test and Confirmation):

The rally to 25,029.50 with high volume (Sign of Strength, SOS) suggests strong demand.A pullback to 25,003.05 (Last Point of Support, LPS) on low volume at the close confirms accumulation.

Phase E (Markup):

A break above 25,175 with high volume in the next session would confirm a markup, targeting 25,310 or higher.

VWAP Analysis for Accumulation:

If the VWAP is around 24,900–24,950, the price at 25,003.05 is above the VWAP, indicating strong demand.The pullback to 25,003.05 (still above VWAP) on lower volume suggests a potential LPS, setting up for a markup.

Evidence Supporting Accumulation:

The price is above all EMAs, and the trend is bullish.The “Buy Zone” at 24,797.74 supports potential accumulation.The price is above the VWAP, indicating strong demand.

Step 3: Select Trade Candidates

The 15-minute range between 24,797.74 and 25,029.50 (231 points) indicates a cause for a potential move. The direction depends on whether the index confirms distribution (break below 25,003.05) or accumulation (break above 25,175).

Step 4: 

Assess Readiness to Move distribution Signals:

The high of 25,029.50 in the “Sell Zone” with high volume suggests an upthrust, indicating readiness for a markdown.A break below 25,003.05 with high volume (SOW) in the next session would confirm bearish momentum.

Accumulation Signals:The rally to 25,029.50 with high volume (SOS) supports bullish momentum.A pullback to 25,003.05 (above VWAP) on low volume (LPS) suggests readiness for a markup.

Step 5: Time Entries and Exits

Bearish Setup (Distribution):

Entry: Short below 25,003.05 with high volume (SOW), or on a weak rally to 25,000–25,003 (LPSY) on low volume in the next session (June 9).

Stop-Loss: Above 25,175 (R2).

Target: 24,963 (R1), 24,797.74 (Buy Zone), 24,605.90 (S1).

Example: On June 9, if the Nifty 50 breaks below 25,003.05 with high volume, short with a stop above 25,175 and a target of 24,963.

Bullish Setup (Accumulation):

Entry: Buy on a pullback to 25,003.05 or 24,963 (LPS) with low volume, or on a breakout above 25,175 with high volume.Stop-Loss: Below 24,963 (R1).Target: 25,310 or higher (based on range projection).

Example: On June 9, if the Nifty 50 pulls back to 25,003.05 on low volume, buy with a stop below 24,963 and a target of 25,310.


Wyckoff Chart Analysis Summary (15-Minute Timeframe)

The Nifty 50 is likely in a distribution phase on the 15-minute timeframe, supported by:The upthrust at 25,029.50 within the “Sell Zone” (25,104.13–25,210.00), with high volume and a small candle body.The price is above the VWAP (assumed 24,900–24,950), and the rejection at the high suggests overbought conditions.The price is near the upper Bollinger Band, indicating a potential pullback.However, the accumulation hypothesis remains plausible because:The price is above all EMAs, and the trend is bullish.The “Buy Zone” at 24,797.74 and the price above VWAP suggest strong demand.

Key Levels:

Support: 25,003.05 (last close), 24,963 (R1), 24,797.74 (Buy Zone), 24,605.90 (S1).Resistance: 25,175 (R2), 25,210 (Sell Zone upper boundary).

VWAP: Assumed at 24,900–24,950; the price at 25,003.05 is above VWAP, indicating a premium but also potential overbought conditions.

Volume Analysis:High volume at 25,029.50 suggests selling pressure (distribution).High volume on the rally to 25,029.50 (earlier in the session) supports accumulation (SOS).


Trading Strategy

Bearish Strategy (Preferred):On June 9, wait for a break below 25,003.05 with high volume (SOW) to confirm distribution.Short with a stop above 25,175 and targets at 24,963 or 24,797.74.Alternatively, sell on a weak rally to 25,000–25,003 on low volume.

Bullish Strategy (Alternative):If the index holds above 25,003.05, buy on a pullback to this level or 24,963 on low volume (LPS).Alternatively, buy a breakout above 25,175 with high volume, with a stop below 24,963 and a target of 25,310.


Point-and-Figure Target:


For distribution, the range of 24,797.74–25,029.50 (231 points) projects a target of 24,797.74 – 231 = 24,566 upon breakdown.For accumulation, a breakout above 25,175 could target 25,175 + 231 = 25,406.

Conclusion

On a 15-minute timeframe, the Nifty 50 is likely in a distribution phase, given the upthrust at 25,029.50 within the “Sell Zone,” high volume with a small candle body, and overbought conditions (price above VWAP and near upper Bollinger Band). Traders should watch for a break below 25,003.05 on June 9 to confirm a markdown, targeting 24,963 or lower. However, if the index holds above 25,003.05 and breaks 25,175 with high volume, it could resume the markup phase, targeting 25,310 or higher. The VWAP (assumed 24,900–24,950) supports the distribution scenario, as the price is at a premium, but a pullback toward VWAP could offer a buying opportunity if accumulation is confirmed.


Anish Jagdish Parashar 

Indirect tax india research 











Disclaimer: Content reflects the views of the author and for trading and investment purposes consult your financial advisor.


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