Arun,
This setup is breakout from consolidation, and many a time, it takes more then one bar to breakout.. or it is also possible that we might get caught in false breakout.
Last week was one of the narrowest week.. (weekly range 132 against 10w average range of 211).
In such tight range market, it is possible that there will be false breakout..
NR4/NR7 is a setup that tells u something about what mkt is doing now and what is possible in next few days.
So that you are well prepared to benefit from the opportunity that is just around the corner.
Lets look last 3 tight weekly range of the past and after-effect of that..
Code:
Weekly range 10wk average range
1) 31/Aug 159 270
Upper Breakout of this range at 4736 took the market to 5030 level. (300 pts opportunity)
2) 29/June 190 315
Down Breakout of this range at 4250 took the market to 3920 level. (330 pts opportunity)
3) 24/Feb 120 198
Down Breakout of this range at 2658 took the market to 2550 level. (100 pts followed by 2400 pts)
But the reversal from there and then upper break of this range at 2798 is
still continuing.
So use the signal given by this setup and draw your own strategy to benefit from it. By their nature, breakout trades have low success rate, hence we need to be prepared to accept that and every breakout will not work.. But over a period of time, it does work. Due to Narrow range, your stops are tight. So loose less but when u win, the size of opportunity is significant provided ur systems know how to ride the trend.
Happy Trading