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Mirror Image Foldback

1) Mirror and water image fold back is a technique in technical analysis where a mirror line is drawn on a chart and past price points are reflected in the mirror to generate support/resistance lines and potential future price points. 2) The accuracy depends on where the mirror is placed - ideally at the end of a major price move. Mirrors can be vertical, horizontal, or a combination to generate different patterns. 3) An example using Just Dial Ltd stock demonstrates reflecting past low points on a vertical mirror to generate angled support/resistance lines corresponding to future price behavior.

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Zendu Balm
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141 views

Mirror Image Foldback

1) Mirror and water image fold back is a technique in technical analysis where a mirror line is drawn on a chart and past price points are reflected in the mirror to generate support/resistance lines and potential future price points. 2) The accuracy depends on where the mirror is placed - ideally at the end of a major price move. Mirrors can be vertical, horizontal, or a combination to generate different patterns. 3) An example using Just Dial Ltd stock demonstrates reflecting past low points on a vertical mirror to generate angled support/resistance lines corresponding to future price behavior.

Uploaded by

Zendu Balm
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Mirror & Water image fold back
In childhood every one of us has drawn a painting on half side of
the page, after painting half part we used to fold the paper and rub it and
the drawing appears on the other half side of the paper. This method is
known as mirror image fold back. Can we do the same with the chart to see
the future half chart with the help of the historical graph? Yes we can do it,
but if we do it in simple manner like we used to do in our childhood we
won’t find similarities with the actual graph. In real chart, mirror image
fold back will match but the price and time co-ordinates may get inter-
changed. Visibly we won’t find any similarities with actual mirror image,
since the graph will not look like mirror of the existing but we can get im-
portant price and time points in the fold back chart or future chart.

The result and the accuracy of this technique depends on the loca-
tion of the placement of mirror on the chart. If mirror is placed on wrong
half it won’t give you satisfactory results. Always try to place mirror at the
end of any major move, it may be up move or down move. Mirror can be
placed vertically to get what we know as mirror image or horizontally to get
water image fold back or in combination of the both.
Initially we will discuss mirror image fold back & its application
method. In this method first we will identify a major move or a rally/
downfall , then we identify the endpoint of the rally and the starting point
of the rally. Now we will draw a vertical line from the end of the rally, we
call this as a mirror point or reflection point. Then we draw a horizontal
line from the reflection point we call this ‘time reflection mirror’. Now we
shift either top or bottom points of the previous rally or move to this mir-
ror line. Moving ahead we now draw angles starting from start point of the
rally to the time reflection mirror passing through all the points on the
mirror.
All the angles act as support as well as resistance lines and the
vertical line from the reflection mirror act as time lines on the chart. Seems
little bit difficult to understand through theory, lets have a practical exam-
ple which will solve all your doubts and bring clarity in mind regarding the
concept.
119
Here we take chart of Just dial Ltd. for demonstration purpose.
We now mark the low point of the rally as point A and high point of the
rally as point B. Now we draw a vertical mirror as well as horizontal time
reflection mirror from point B as shown in below fig 7.1.

Fig 7.1– Just Dial Ltd.

Now we will shift all the low points of the rally A-B on the vertical
mirror as shown in the fig 7.2 below.

Fig 7.2– Just Dial Ltd.


120
Now we will draw angles from point A passing through all the
shifted points. We will extend these angles till the horizontal time reflec-
tion mirror. We will draw vertical lines from the point where these angle
meets horizontal mirror.

Fig 7.3 – Just Dial Ltd.

Let us see how this mirror geometry has worked.

Point 1— Precise support taken at angle.

Point 2– Again exact support of angle and also the time line has matched.

Point 3—strong support of angle.

Point 4—Downfall started from exact timeline.

Point 5 & 6—excellent support of the angle.

After breaking angle seen in point 5 & 6 scrip went down heavily
and then bounced back rapidly from some unknown point. Since it has
gone below the lowest point of the rally marked by A-B no angle seems to
give us that level.

Now we take water image fold back. We need to apply Mirror


horizontally. We will place the mirror exactly horizontal to the point A. We
already have one vertical mirror at point B., so we will get one cross sec-
tion of vertical and horizontal mirror marked as point C in the fig 7.4.
121
Now the images of the points on vertical mirror will get reflected
on the horizontal mirror, as shown in fig 7.4 below.

Fig 7.4 – Just Dial Ltd.


Now we will draw angle starting from point A and passing through
the image of the horizontal mirror. Let us take only first mirror point. See
the below shown fig 7.5. It’s a perfect level from which scrip has started the
rally. Thus by adjusting mirror horizontally we could get the major impor-
tant turning points of the scrip.

Fig 7.5 – Just Dial Ltd.


122
In the above example we have shifted price points on the mirror to
find out the geometrically important future points. Now we will take hori-
zontal mirror and shift time point on the mirror to check the geometry.
Here we are testing the principle on Inox wind Ltd. The scrip marked im-
portant low of Rs 315 on 25th Aug 2015, we will place horizontal mirror at
this low. Now we shift the important low of 1st day of listing i.e. Rs.400
marked on 9th Apr 2015. The time distance between 9th Apr 2015 to 25th
Aug 2015 is 96 days, as shown in fig 7.6 below. Now we converted this time
to price distance of Rs 96 and marked the horizontal line Rs 96 below the
mirror. See the below shown figure scrip has taken strong support at that
zone.

Fig 7.6 – Inox Wind Ltd.

In the same fashion we now shift important high lows to the mir-
ror then get time distance from mirror base point and convert it to price
below the mirror, see the points marked as A,B,C amazing performance !!!

Fig 7.7 – Inox Wind Ltd.


123
Lets take another example of horizontal mirror with time shifting,
here we take Wockhard Pharma. We have marked low of Rs 1125 dated
8th Sept 2015 as important low for placing horizontal mirror. Now we shift
the most important high of 8th Apr 2015 on mirror creating a distance of
107 days from the Mirror base point. This time of 107 days we convert to
price and went down Rs 107 on price axis or y axis. Surprisingly that is the
ultimate low of the scrip, see fig 7.8 below.

Fig 7.8 – Wockpharma Ltd.

Most important warning to reader, these calculations work only on


Mitotic scaled chart hence should not be tried on any other scale.

In the above example rate of mirror base point is Rs 1125/- if we


deduct 107 from Rs 1125/- we get Rs 1018, but the actual low marked by
the scrip is Rs 705/-. Mitotic scaled chart will only give the target of Rs
705/- and not any other method of scaling, hence caution is advised.

The same thing is advised while using the method of shifting of


price point on the vertical or horizontal mirror. Results will not be satisfac-
tory if another scale is used.

Let us see how the method of price point shifting works here.
124
Here we have placed 4 mirrors simultaneously. Mirror M1 is
placed vertically at low of 8th Aug 2013, Mirror M2 is placed horizontally
on the same spot marked as Point B in below shown fig 7.9. Mirror M3 is
placed vertically at high of 19th Mar 2015 and Mirror M4 is placed hori-
zontally on the same spot.

Now we shifted intermediate high of 16th May 2013 to the mirror


M1 and drawn angle passing through this point till mirror M2. The vertical
reflection of this point has given us point no.5 which is price time balanc-
ing point, because it has taken support of one of the angles.

In the similar fashion we have shifted important high low price


points to the mirror M3 and angles are drawn passing through the reflec-
tion points on the mirror. Moving forward these angles get reflected from
the mirror M4 giving us the important time lines.

See the below shown fig 7.9 for verification of the result. Point no 1
shows the support taken by the scrip on one of the angles. Point no 2
shows the exact time of the top of intermediate move. Point no 3 again
shows strong support on one of the angles. Point no 4 shows the break of
the angles and resistance to the same before continuing the downfall to the
point no 5 which has balanced price and time. Multiple Mirror give us con-
fluence points which are more reliable while taking decisions.

Fig 7.9 – Wockpharma Ltd.

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