Nifty has been in the profit booking mode as we expected in our post #172 Update. Our 1st tgt on downside was 5810 and it has been almost achieved with a low of 5811 on Nifty index. Markets had been pretty range bound which has head scratching for traders. Now the tgt is 5677 but looking at the hourly chart we may see some short covering next week and that may be the end of downside correction. We expect a positive close on Monday which is a important close as its Monthly closing on the chart. We recommend to close shorts on Monday and wait for some confirmation to go long.
On our post #172 on Nifty we mentioned to Short index and we are still have status quo view. This rally could be just a intermediate covering. We expect this rally to pause near to 5974/6000/6025. DONT BUY positional but consider this rally to short for those who had missed last time. Stop loss to our shorts is at 6112. Yes, For intraday traders or BTST traders you may go long with the tgts at Pause station
RBI governor did surprise markets as traders were expecting a status quo but he did raise repo rate. May be it is the right step has increasing inflation is a concern for our country and even technically it was time for some profit booking on the charts on Nifty. We have got a good thousand points move non-stop and it was the bliss for those atleast got 50% move correct. Next week being expiry it ought to be profit booking as this expiry was only a up move. Next month is going to be earning season and we might continue see disappointing earnings since currency had de-valuated a lot this quarter. Markets are overbought technically on the daily chart and we are expecting some downside in coming weeks. Our strategy is to SHORT Nifty below 5988 with SL of 6090 (Closing basis) tgts 5810/5677/5586
Tomorrow being RBI policy we recommend to buy NIFTY 6000 PUT (Sept) near to 33 to hedge your long position (Max loss=1650/lot)
Nifty has been taking strong support at 5 EMA at 5827 which i consider to be a crucial avg for a week trader. These 2 days are crucial for DOW as FOMC meet begins. Tapering is expected to be almost $10billion. We all must wait for the result tomorrow. But chart patterns suggest a 70% chances a up-move. DOW is technically at confusing state but daily indicators are suggesting a upside bais too. RBI bank review is on 20th September and we dont expect at rate cut and i guess market is already discounting it. So we are in a consolidation phase and nifty’s downside is capped at 5690-5718. Our Strategy would be going Long and averaging your positions around 5691-5718 with targets of 6030-6150. (Closing basis)
Yesterday i did mention to square-off Longs after nifty closes below 5871 and today it closed below. But i would suggest you all to ignore todays close and DO NOT CLOSE longs tomorrow UNLESS it trades below 5832 tomorrow. Today IIP numbers were announced after markets and Inflation too. Both the numbers have shown some extra ordinary improvement. So wait and watch for tomorrow