Near Term Trend: ↓ (Down)
Market update: Nifty opened on a strong note at 10870 levels and kept trading in a tight range for most of the day. There was violent fall in second session and index dropped to 10750 levels and immediately staged a smart recovery of 100+ points to close above 10850.
Markets were extremely volatile throughout the day. I have been mentioning in my posts everyday that volatility is likely to be picked up and if one is not careful or try to be too adventurous, hes likely to be trapped by market in these choppy moves. Today many traders got trapped on both sides and suffered heavy losses. Todays move was just one small example and one needs to be extremely careful about trading in such markets.
Overall, today was another day where Nifty dropped first and then recovered from day lows but at the same time not able to post any gain above the opening price. I mentioned in my yesterdays post that "Bulls are supporting market on every drop but are not willing to invest further above opening price" same thing we got to see today as well. So much of choppiness is suggesting that markets are preparing for its next move ( up or down) and its likely to be violent and should come soon now ( surely choppiness can remain for few more days but that doesn't change anything)
Prices are still contracting, if you ignore the intraday volatility then Nifty has been able to add just 50 points today which is still very much within threshold of 'contraction'. If you notice daily charts, it took Nifty 3 days to fall from 10916 levels to 10630 and now it has taken 3 days to retrace around 80% of the fall. Ideally bulls would have liked to see full 100% retracement by now ( we still need to see how tomorrows trading goes because on Sensex chart this down move took about 4 days).
We maintain our bearish stance for now, however todays sharp pull back is capable of changing Niftys trend for short term as todays last hour move felt like a perfect 'Bear Trap' (depends on how Bull take it from here).
Trading recommendation: No trade is recommended at these levels. if someone is long he can square off his position and wait for markets to give confirmation and enter again. We are still holding 2 parts short ( 10840) and even though temptation was high to add shorts below 10800 levels we resisted as the nifty movement was not convincing. Many intraday traders did enter short below 10800 levels today were seen running for cover in last 30 minutes).
Happy trading to you!
Market update: Nifty opened on a strong note at 10870 levels and kept trading in a tight range for most of the day. There was violent fall in second session and index dropped to 10750 levels and immediately staged a smart recovery of 100+ points to close above 10850.
Markets were extremely volatile throughout the day. I have been mentioning in my posts everyday that volatility is likely to be picked up and if one is not careful or try to be too adventurous, hes likely to be trapped by market in these choppy moves. Today many traders got trapped on both sides and suffered heavy losses. Todays move was just one small example and one needs to be extremely careful about trading in such markets.
Overall, today was another day where Nifty dropped first and then recovered from day lows but at the same time not able to post any gain above the opening price. I mentioned in my yesterdays post that "Bulls are supporting market on every drop but are not willing to invest further above opening price" same thing we got to see today as well. So much of choppiness is suggesting that markets are preparing for its next move ( up or down) and its likely to be violent and should come soon now ( surely choppiness can remain for few more days but that doesn't change anything)
Prices are still contracting, if you ignore the intraday volatility then Nifty has been able to add just 50 points today which is still very much within threshold of 'contraction'. If you notice daily charts, it took Nifty 3 days to fall from 10916 levels to 10630 and now it has taken 3 days to retrace around 80% of the fall. Ideally bulls would have liked to see full 100% retracement by now ( we still need to see how tomorrows trading goes because on Sensex chart this down move took about 4 days).
We maintain our bearish stance for now, however todays sharp pull back is capable of changing Niftys trend for short term as todays last hour move felt like a perfect 'Bear Trap' (depends on how Bull take it from here).
Trading recommendation: No trade is recommended at these levels. if someone is long he can square off his position and wait for markets to give confirmation and enter again. We are still holding 2 parts short ( 10840) and even though temptation was high to add shorts below 10800 levels we resisted as the nifty movement was not convincing. Many intraday traders did enter short below 10800 levels today were seen running for cover in last 30 minutes).
Happy trading to you!
Well analyzed
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