Nifty Watch

Nifty Watch:- The Nifty opened lower with a 30 point gap at 5292. The Index quickly made a low at 5260, then moved up to 5340 and down to 5280, a number of times in very choppy trading. Towards the end of day, the Index fell dramatically to a low of 5230, before some buying finally took it to 5280. Today’s candle resembles a DOJI. A DOJI which comes after a sustained down move may suggest that at least a short term low is in place. So far, the Nifty remains above 5200, aggressive traders can consider taking short term buying positions.

TA Insync(55-5) has gone below minus 60, continued to oversold. In a strong downtrend, this indicator can remain oversold for many days. We can correlate the indicator with the price pattern of a DOJI. Together, this can suggest that the selling may be coming to an end, at least for the short term.

Our downside target is 5130. The Nifty has come almost close to this level. Therefore, traders should wait for the selling to subside and look to take buy positions.

Level:- Looking for minor support at 5230. Major support may come at 5130. The resistance comes at 5400.

Summary:- Aggressive traders who are willing to take more risk in the market may consider buying calls / selling puts or buying futures in the next few days. Please trade with stops. We may see a relief rally take the Nifty all the way up to 5620, but this should be considered as a correction in a bear market, we are in a downtrending market and facing a daily new low.

Investors should hold on to their cash. Wait for the decline to end, and, a base building process to start. That will give a buying opportunity in the market. This requires time. So, keep patience