Friday, December 7, 2018

Nifty View: Update for 10th Dec 2018


Market Update: Nifty saw a sharp upmove today and closed around 90 points up around 10690 levels. I had mentioned yesterday that even though the Nifty is down its definitely not out. Bears may have been able to pull the markets down in last 2-3 days but overall the market remained in the bullish trend. Nifty was oversold yesterday and even the RSI gave a positive divergence so there was not much scope for Nifty to move down in short term. Bears had to take Nifty down below 10500 today to signal a fresh downmove but it was always a difficult task

Having said that now the question is whether Nifty is out of woods? We cant say that with surety yet. Todays bounce back was more on technical parameters. it was a bounce back from oversold territory. If nifty can build on the gains tomorrow and cross 10750-10800 levels then probably yes we can say that  Nifty has resumed its upmove but till that time there is always a risk of testing 10600 levels again. especially since the election results are round the corner and Nifty can be volatile for next 1-2 days. I am hopeful that soon the real trend will emerge and we should be able to take a trading call. For now the fall from 10930 levels to 10600 does look like a corrective fall (inspite of a vicious 174 points fall yesterday). I still believe Nifty is in bullish phase and unless proven otherwise I will continue to believe so. That's what I mentioned yesterday ( todays rally is a testimony to that) and even today I will stick to that. Reason we are not taking a trading call right now or we exited from our longs is that risk on the downside has increased a little bit. There is always a risk when you take a trading call in market but once the risk reward ratio is not in your favour then you should always sit out and that's how you respect markets.

As per my wave count the move from 10930 to 10600 its still a corrective move which means a move on the upside is pending. But probably the corrective move is not yet finished so we can see another leg down. On the other hand if the rally continues that would mean corrective move is over and the fall yesterday was a bear trap ( will publish charts soon).

Lots of my friends and followers are asking me why I am not  bearish even though Dow is falling 800 points daily and when election results ( which BJP is expected to lose) are around the corner. My answer is simple, Nifty will do what it wants to do irrespective of what Dow or election result does. For short term we might see some swings here n there but overall the tone of market will remain same and as a swing trader we have to stay with broader trend. Short term swing of 100-150 points should not bother us.

Trading recommendation: We have no position right now and waiting for next trading call. I do not recommend any long or short at current levels. Markets could turn volatile and you may find yourself on the wrong side in no time. Overall trend remains bullish just wait for risk reward ratio to be in your favour before you act even if it means entering a bit late and losing 100-150 points . Enjoy your weekend.



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