The “Ball + Gravity” Concept in Markets — Technical Analysis
Observing the markets from a long time, I have seen a very peculiar thing which I am going to explain. This is a hypothesis which could fundamentally explain many technical chart patterns which are already used in market to predict price movements, viz.:
- Head & Shoulder
- Cup & Handle
- Double Bottom / Double Top
Do you see anything common in all the above formations? I do.
How does a Ball Move
To gather the concept, let’s understand how a ball moves when thrown:
The movement is a combinations of ‘spikes’ and ‘curves’. Note that the spikes point in the direction of gravity, while curves form against it.
Now the thing is to apply the same concept of ball movement to price movement in markets.
Define Gravity
First step is to figure out the direction of gravity. From the above, it’s definitely the one where spikes point.
Now a stock will finally move in the direction of gravity.
Let’s apply the concept to different pre-existing chart patterns:
Notice that the spikes are pointing upwards, which is where gravity lies. Which means that stock moves up ultimately.
Spikes are visible downwards, supports the concept.
Spikes pointing up, where the price finally goes.
Summary
Identify spikes and curves in the chart
Identify the direction of gravity — the ultimate direction where the price should move.
Here’s a recent price movement in Nifty50, till 10th of Feb 2021. Where do you think it should go? Tell us in comments.
Originally published at moneyplication.in
