Yesterday, Tuesday, was an NR7 day. Today, the Nifty opened steady, then moved up throughout the day to close at the top of the day’s range. The message is: After an NR7 day, a trending moev can be expected. With today’s gains, the Nifty stands at 5480. This is within the original 5400 – 5600 range. We did see a pivot high at 5535 which means that the Index could now face resistance around 5535. Earlier we had a pattern of lower lows when the Nifty came down to 5348 just two days ago. If the Index closes above 5535 then we have a pattern of higher highs. This has not yet taken place, which means we are simply discussing what could come about if the Nifty rally continues.
Markets are certainly in some kind of a no trade zone. There are day trades on both sides – long and short. But, taking a position is not rewarding inside a trading zone. However, the Nifty did breakdown below 5400 and closed below this number for two days. Therefore, we have to take a bearish bias for the markets. Trading then is to be on the short side, with a stop above 5535. Remember that this is the cash nifty, not futures.
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