Wednesday, April 20, 2011

What is a trading range?

When prices are bound by two well identified levels, it is a trading range. For the Nifty, we have seen repeated attempts to cross 90. So far,that level has acted as resistance. This is one line. The Nifty dips but finds support around 70, again and again. So this is the second line - support.

The Nifty is locked in a trading range. Trading inside a range is fraught with danger. Each day can be up or down since there is no trend, that is wht there is a range. Trading should be done on lower time frames - preferably intraday. The big trade will come when prices move out of the range. Therefore, trade carefully, inside these boundaries.

1 comment:

jitender said...

Hello Sudarshan Ji
What is your outlook on Nifty for the next six months ?
Your fan & follower
Jitender Yadav
Delhi