The Nifty continues to inch upward, with a bullish bias. We are around 5200 which is just 20% lower than the all time highs for the Nifty.
The market is also at the psychological resistance of 5180 - 5200. Since the trend is UP, it is sensible to take trades in the trend direction. Our strategy is to search for dips to buy.A high risk, high reward trade is to buy puts since 5200 is a resistance area. By adjusting your volumes, it is possible to do both trades (for the PUT's , keep volumes low).
Many charts show base building patterns. Perhaps, it is wiser to focus on individual stocks and ignore the movement of the Nifty.
In the Nifty scenarios, briefly discussed above, one possible scenario is for the Nifty to continue going up without any pause. We are likely to stay away if this happens. A dip or consolidation is required for taking a fresh long trade.
What will the New Year bring?
Well, extended trading hours for sure. We could easily continue with choppy market conditions as we move towards the union budget. A traditional pre budget rally is quite possible. Will that be the end of this up move? Maybe.
A New Year Resolution
One, focus on gaining epertise in one or two trading strategies. Two, write your trading journal, every day.