After long time i am posting to you guys but am sure if you guys have followed as per my last post you are having a Gala time at D-Street. On my last post “Tug Of War” i had a recommended a conditional strategy on the index and fortunately we got the breakout on the upside and a buy call was triggered above 7690. The rally from trigger points has almost burnt fingers of short traders but long traders have enjoyed the move. One of the best confirmation for long term has been achieved today which is that we have closed over 200 Day SMA , 7865, for 3 consecutive sessions which is a condition for ‘Technical Confirmation’ . Indicators on daily charts are surely in overbought zone but weekly indicators are extremely in positive momentum. So each dip should be regarded as a buying opportunity for long term investors. While traders now can follow trailing SL of 7750 while can book partial profit on upside around 8050.
Tug of war continues between the bulls and bears! The game has been tough since February but the bulls seems to be getting favorite on traders list! Each try to short markets have burnt fingers in last two weeks. Today when Bears had almost go the rope in their zone, bulls came with the full force and pulled all the short players away in just one hour of trade. Technically, Nifty candles has emerged to show the small downside path which it is following as of now. Indicators on daily charts are still in overbought zone but the weekly indicators are up again supporting upside momentum. Though confirmed Long is above 7750 but stock specific we shall stay long. On the upside we have exactly closed at trend line resistance so opening tomorrow is crucial. Now, on the upside we have strong green line resistance which is at 7777. So now on downside we have trigger support at 7520.
Strategy: Long above 7690 and Short below 7520
Nifty has confirmed Nifty bank average today which is sell on rise for the short term traders. In my earlier post today i initiated sell call on Nifty Bank but now Nifty charts two have confirmed the other average with Double Top formation. As we all could notice that neckline was around 7590 where markets was taking support since last 4 times. Fortunately that was even the 100 day average which is making my view more stronger. On the side factor, indicators have given bearish crossovers and also the option data is suggesting 7400-7450 range to be achieved once this expiry. So hold your shorts and cover your longs.
Target on Downside: 7450, and if that breaks 7301. Stop loss on upside is 7650
Nifty has been pretty confusing in last 3 weeks of trading where we have almost seen 6 Doji’s on daily chart with represents confusion on D-Street. Today also we have got a candle depicting same characteristics as a Doji. Daily chart indicators have already entered overbought zone but still we haven’t got any clear confirmation for trade on either side from this point of market. Weekly charts are still suggesting a strong rally though intermediate waves could occur on the daily charts. We are approaching 200 day average which is around 7850 and one should remain cautious. Even Bank policy is in next 3 sessions so expect volatility to be at highest level. Though tomorrow move would tell us alot about what next to come. So sit tight for tomorrow flight!!!
Nifty Drifts successfully on the U-Turn to resume the unfinished up-move. Until yesterday, charts were smelling that we could witness a profit booking ahead of expiry and year end but i was proved wrong today. Just like a car gets off road during race and its not expected to be back on track, Nifty was the same but it has been successfully to be back on track with “Morning Star Pattern” daily charts. As you call can notice on the chart that yesterdays close was with Grave Stone Doji exactly on 100 Day SMA, i was expecting it to breakdown which was also supported by Options. But yellen’s speech last night proved everyone wrong on Daily chart and it has resumed uptrend which was still intact on weekly charts. Now upside resistance is at 200 day average at 7850 which is also nearing to weekly channel resistance at 7945. On the downside 100 Day SMA at 7590 should act as immediate support.
Nifty traded in the strict range throughout the day and remained volatile between the range. But the close was with some bearish outline on the charts. Firstly, a Grave Stone Doji has been embarked on daily chart which indicates a bearish mood among traders who closed positions or markets to days low. Secondly, Nifty ended exactly near to the 100 day average at 7594 making tomorrow’s open most pivot factor for the expiry close. If the open is even a point lower to 7594 than it would confirm both the bearish factors formed today. On the option side, 7600-7700 Calls have added open interest suggesting heavy writing and sealing a wall for next two days on the upside. Even the MACD short moving average has crossed over negatively over the long one suggesting a Sell on rise strategy. So my Nifty strategy remains intact as suggested Yesterday.
Nifty has witnessed almost 900 points rally from the low this expiry to the high of today. Rally was uninterrupted by bears at any day but it seems game was all over for bulls today. 7720 was my strong resistance on closing basis which has been intact even today but we also have witnessed a strong red candle almost engulfing last entire week. Though we need confirmation which can be obtained only on Fridays close but looking at other factors we can be rest assured that volatility would be at the peak this week. Technically speaking, we had a gap at 7721 which is now filled and acting as strong resistance. Secondly Fibonacci level was at 7700 and Finally 7700-7600-7500 Puts have witnessed unwinding while 7700-7600 Calls have witnessed write-off. Combining all the factors, it surely seems that we are going to see some extreme volatile profit booking in upcoming days. So now may be traders could take a short view for the April expiry with targets of 7480/ 7350 with a stop loss of 7750.
Nifty has been in pretty positive mood these days compared to global peers where we are witnessing profit booking. Nifty opened up almost flat and remained in the tight range with a derivative resistance of 7700 through the first half of the day but than we did witness some fierce intraday sell-off which did not last for long. We finally recovered all the lost ground and filled up the gap exactly at 7721. Nifty has given a spinning top creating more confusion ahead. Though derivatives are shifting resistances from 7700 to 7800 but technical are suggesting that Nifty is in Resistance web. So yet no clear trend for the medium term so am just waiting for some one perfect call. Stock specific trading should continue.
Nifty has given outstanding performance for this series which was not really expected from the bulls. Though its very difficult to pick up the lowest and highest price but still we did get enough part of the rally in our pockets. As i had mentioned in earlier post that Nifty has entered resistance cluster so not getting any confidence trade on either side. So its better to talk about resistance levels and support levels on the daily charts. Today for the first time we closed above 100 day SMA at 7615 after 28th October 2015. Now on the upside we face a small intraday resistance of a gap around 7721 while above that we have resistance of downward sloping resistance line from life high which is around 7850 and 200 day SMA which is at 7905. On the wave theory we have 7700 and 7900 as resistance levels so we should keep that levels in mind while taking positions. Though i would suggest to go stock specific trade next week rather than index.
Nifty finally breaks the trap line at 7580 and we closed above 7600 above first time in last two months. My stop loss 7600 on closing basis have been triggered today. Technically, still the road is not clear to take a fresh longs as many resistance points are hitching around same levels. While todays high had triggered Double bottom target which was 7615 now the next resistance is Broadening formation trend line around 7660. Coincidentally 7615 is also a 100 EMA which has been acting as strong resistance since we traded below the same in August downfall last year. So now the range of 7600-7700 because wait and watch situation. So currently No fresh positions recommended for new players but if you are long for short term than time to start booking profits for march series while if short players havent squared off than now they can take lil risk till 7700 which is strong resistance from options data. So now i would prefer stock specific trading till end of Expiry as we have many holidays too.