How is Bank Nifty Trading in 2023 respective to Yearly Pivot?

Technical Analysis
1

Pivot points are simple mathematical formula for calculating support and resistance in future…

For the year 2022…
Bank Nifty opened @ 35585.20, made high of 45151.80, made low of 32155.5 and closed @ 42986.45
closing the year with +7504 points gain …i.e Bank Nifty gave +21.15% return on 2022 based on yearly close of 2021

Open=35585.20
High=45151.80
Low=32155.5
Close=42986.45

Calculating the support and resitance for 2023 based on OHLC values of 2022

Yearly pivot point(YPP) = (High+Low+Close)/3

YPP = (45151.80 + 32155.5 + 42986.45 ) /3 = 39765
YBP = ( High+low )/2 = (45151.80+32155.5)/2 = 38154
YTP = (2YPP - YBP) = (239765 - 38154) = 41375.50

Just like for intraday’s daily CPR let’s say the above calculations( YTP, YPP, YBP) is yearly CPR

As Bank Nifty closed the year 2022 @ 42986.45 above yearly CPR (YTP,YPP,YBP) for 2023, the yearly CPR of 2023 likely to act as support

i.e (38154, 39765,41375) to act as support ,by the mid of March 2023 Bank Nifty reached YPP 39765 and took support

If the yearly CPR for 2023 is higher than yearly CPR of 2022 than it is considered bullish

Now,
Camarilla Reversal levels(Pivots)

YL3 = Close - (High-Low)*1.1/4
= 42986.45 - ( 45151.80 - 32155.5)*1.1/4
= 39687

YL3 = 39687( From here Bank Nifty took support by mid of march 2023)

For the year 2023, Yearly Pivot ie (mid point of Yearly CPR) ,YPP= 39765 which is apprx equal to YL3= 39687 (A confluence level of support)

YH3 = Close +( High - Low )*1.1/4
= 42986.45+( 45151.80- 32155.50) *1.1/4
= 46285

YH3 = 46285

Bank Nifty reached YH3= 46285 on 21 July 2023 and show a sharp down move -2680 point i.e -5.91% down from YH3 46285

In the previous year 2022 by end of January, Bank Nifty reversed from YH3(38820) to YL3(32143) i.e a downward rally of -6700 pts… and remained above YL3 and finally broke YH3 upside on August 2022

Below is the weekly chart of Bank Nifty which show how price reacted to yearly CPR and Yearly Camarilla pivots, from the year 2017 to 2023

Bank Nifty Weekly Chart
Bank Nifty Weekly Chart2531×1211 215 KB

2

Can you explain this for layman?

3

Pivot Points are potential support and resistances for tomorrow calculated using today’s OHLC values. Here they’re used on yearly timeframe.

4

Just curious to know the probability of these supports and resistance working in real market.

5

It’s actually good, it’s been in use since like when Americans traded on the floor, but though I don’t know the precide year or decade. The problem with them is if the range of today is not high, tomorrow’s large moves can’t be anticipated, or if the range of today is big, same for small moves. It works best if range of consecutive days is similar.

6

If everybody knows it, and everybody trades the same way, then such levels should never be broken right?

7

They have mostly respected, but sometimes they’re off by 10-20%. Everybody doesn’t actually use them, some do. It’s surprising you taking an interest in it, aren’t you kind of a no-charts guy?

1 Like
8

Hahaha. Yes. I learn about others behaviour. Like how others think and behave. And usually I take contra trades. I wanna stay in the minority always.

Edit:

Second reason to show interest: markets are boring today. Nothing much to do.

1 Like
9

Oh man, please don’t take a bet against me :sweat_smile:. Honestly pivots are actually not easy to counter, unless some price action is forming. If there was a way, I would tell you. I don’t trade them anymore.

1 Like
10

I won’t be trading against them. Because I will not even know the support or resistance is broken. :rofl::rofl:

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11

Thanks, man! :saluting_face:.

12

Price action at YPP and YL3 @ live market

bank nift jan-feb
bank nift jan-feb2475×1211 180 KB

Price action @ YTP live market

bank nifty apr
bank nifty apr2475×1211 152 KB

Price action at YH3 live market

bank nifty july
bank nifty july2475×1211 180 KB

The analysis above was done on weekly time frame for i.e yearly…

As you were curious of how they behave in real time market…Yes pivot are respected …

13

On 30th Jan, there is a long tail. So if we had gone long at support, don’t you think SL would have been triggered?

14

Yes if you build position early. If you wait for some evidence of reversal to show up, you’ll be safe. My rule was to see if price is rejected beyond and then take a contra trade.

EDIT: I recall you’re a level trader. Yes, pivot points can really work for you. I only quit them because TradingView messed the charts up when applied them. Manually drawing isn’t practical for me as I track all Nifty stocks.

15

Okay it’s too much for me. Thanks for clarifying. I am too dumb to understand all this.

Nah. I am not. I just buy on dips and sell on rise. I am more of a probability and law of averages person. That’s it. No charts. No levels. No technicals.

1 Like