Thursday, September 22, 2011

Nifty Resistance Holds

On Wednesday(Yesterday), the Nify retreated back from the 5165 resistance line. The close was mildly lower but it is reasonable to expect lower levels today, with deep declines in the U.S. markets overnight. The Nifty now offers a number of possibilities:

1. A bullish head and shoulder pattern in development remains possible so far the Index stays above 4900. With every passing day, the neckline will become stronger resistance, but the pattern is not yet cancelled.

2. The current up move is over, with the Nifty rally coming to an end. Short positions may be taken for the intermediate term, using the 5200 round figure as a mental stop. The downtrend gets confirmed below 4900.

3. Nifty remains between 5165 and 4900 making a long trading range. A move out of this range will give a tradeable opportunity.

No matter what the Index does, traders should do such visualisation.  This exercise gives a view on the Nifty which is essential for short term traders.

5 comments:

RS said...

Sir, Over the last month and a half, we have seen a lot of gap downs. Guess, would be great if you could please put up a comprehensive post on trading the "GAPS". I am sure whoever reads ur blog knows the basics of gap (gaps generally get filled and all that stuff....)Its that "Gap trade" that flummoxes everybody. Example...the 5200 gap for last 1-1.5 months.

Regards
RS (Baba)

rohit said...

That is right but I would consider 2nd and 3rd options most probable and very low probability for the 1st option, but anything can happen because volatality levels are very high, but markets are the boss, we just follow it, most of the time things happen which are least expected and every time that happens we are humbled.Our arrogance is shaken!!!

rocky said...

thanks sir, i want to ask if we use day opening range strategy or NR 7 strategy we can gain limited points if market is trending we are not able to capture full trend in case market is dull most of times it breaks day high and similarly days low and stop loss got triggred . so which strategy we must used for range bound. and how to capture trend in order to maximise profits

Balu said...

Sir

It looks like a buying opportuniy sir since broadly trend remains up above 4900. Also joining trendline 4720 to 4910 on daily and weekly charts we see buying chance.. with a stop of trendline violation on weekly closing basis tomorrow..

Plz give us your thought sir

Regards
Balu

Rushabh Shastri said...

I personally believe when trade nifty, focus also content of that MAINLY, reliance/sbi.....today main culprit was RELIANCE....One can not ignore some of the heavy weight while trading in nifty....IT stocks, SBI, ICICI BANK, reliance,,,are some of the best of DRIVER OF NIFTY