Nifty has been pretty range bound since last two expires with slowly pinching new high but since this monday we have got some signs of profit booking. Since my last two posts i was awaiting a small profit booking on the index and finally this week has given some strong signs of downside move.  Though this fall would be considered just a profit booking against the strong long term bull run and so consider this as a opportunity to accumulate quality stocks for long term. Nifty has crucial support levels at 9250-9300 which could be the max as of now in near future. Todays close on Nifty has been at crucial triple support level at 9578! 

So as you all can notice in the graph above, 9578 is support for three factors

  1. Trend line from the low of 2017 year 8148 on 2nd Jan
  2. Downside Channel Support which is drawn from life high at 9709 
  3. 20 day EMA which is also taken as support since start of this calendar year

Supporting above all factors, we also have momentum indicators weakening from Over bought zone with some negative divergence from RSI to price. On daily chart at life high we also have got Bearish Engulfing candlestick pattern which is bullish reversal and its a strongly valid  near to such highs. Even if we looking at Banking sector than that too is weakening which is a strong sign of reversal. From derivative side too we had constantly witness 9700 CE been written by traders which acted as strong resistance. On the downside 9500 is currently suggested as strong support below which gates open straight away for 9250! So strategy for traders would be buying 9500 PE and selling 9700 CE for tgt of 9300!

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