Nifty Future Price Action 17 Sep 2012

Due to strong overnight cues Nifty Spot opened above the Swing high of 5630. On open there was a strong selloff below the Nifty Spot 5630 level. After the RBI announcement of no rate cuts, the down move resumed till the previous days high. As per the price action setup there was only one good short trade setup. The up move started on weak signal bars and did not have deep pullback for long trade entries. Nifty Future closed the gap but did not fall in the previous days trading range.

I have posted my observations on the significant bars

Bar 1: Strong Bull trend Reversal Signal Bar of the Nifty Spot 5630 level. But the next entry bar fails to move 1 tick higher and is an inside bar signifying failure to reverse.
Bar 2: Strong Bull trend Reversal Signal Bar close to the 21EMA. The next bar fails to move 1 tick higher than the signal bar
Bar 3: Price moves above the Initial Range low. Not good idea to add long as the 11:00am RBI news event would blow stops in both direction. This reversal is a 3 push Trend Channel line overshoot pullback if one assumes the gap up open as a spike.
Bar 4: Pullback to test the upward trend line and the Initial Range Low. Next bar closes above this bar signifying continuation of uptrend. Can Expect a move till the Nifty Future level 5646 the high of the 1st pullback  of the gap up.
Bar 5: After the news flow, the bar prior to current bar is a large Bear trend Bar that closes below the low of the previous 12 bars in the up move. This Bar has a clean breakout from the 21EMA. The current bar pulls back to the 21EMA but fails to close above it. This bar is a strong reversal bull trend bar but the next bar reverses the breakout failure attempt.
Bar 6: This Bar is a strong Bull trend reversal bar that reverses the entry into the downward trend line. But the next entry bar is an inside bar, signaling the lack of strength in the reversal.
Bar 7: This bar is a weak breakout of the micro trend line with a doji bar with a long tail at the top. The next bar pulls back to the micro trend line and resumes up move.
Bar 8: Price moves till the 21EMA but the bars at the breakout attempt is a doji bar signifying weak attempt to move up. Add short position at the 21EMA with stop loss above the 21EMA and target as the Previous Day High.
Bar 9: The prior bar is a strong bear trend bar that breaks the days low. The current bar attempts to reverse the breakout but fails and transforms into a weak doji with a long tail at the top. The next bar is a single bar breakout failure of the Previous Day high. Close the short position at the Previous Day High.
Bar 10: A weak reversal bar of the breakout attempt of the Previous Day High. The signal bar is a weak doji but the entry bar is a strong Bull trend bar. Two bars after the current bar breaks the downward trend line and touches the 21EMA.
Bar 11: A breakout from the 21EMA after a consolidation with strong trend bars below the 21EMA signifying strength of up move. This despite weak signal bar.
Bar 12: Strong Bull trend Bar breakout from the downward trend line. The next bar attempt to reverse this up move fails. Price does not give a deep pullback for a long entry better to stay out.
Bar 13: Strong Bear trend Reversal Signal Bar of the attempt to breakout from the Initial Range low. The entry bar is a weak bull body bar which stops the reversal.
Bar 14: Strong Bear Trend Bar that comes after two inside bar in a row a ii pattern which signals a possible breakout. This reversal was after a 3 push up pattern but without a Trend Channel line overshoot. This Bar closes below the low of the prior 12 bars and breaks out below the 21EMA. This signifies strength in the down move.
Bar 15: This small inside bar is not a good follow through bar but tests the 21EMA and a possible short but occurs at the session close. So not a good trade.