Near Term Trend: ↔ (sideways)
Market update: Nifty had a blast today. It opened with a gap up at 10700 levels and never looked back. Kept rising through entire session and closed at highest point of the day at 10830 up 180 points.
We had mentioned in our previous post that since last 3 months Nifty is playing a familiar script where it falls for 4-6 days and then rises for 4-6 days. So overall there is absolutely no movement and market is just dancing around at same levels in a tight range. After falling for 6 days (and touching 10580 levels) market has now started moving up. It will be interesting to see if bulls can maintain and carry the moment for more than 4-5 days. For nifty to break this tight range of 10500-10900 this 4-6 days of alternate bull/bear moves needs to break as well.
Coming back to todays movement, it was pretty strong and carry a lot of weightage specially since it has come just one day ahead of budget. We had also mentioned yesterday that presently there are 3 scenario developing and its possible that a) either market has started a new leg down or b) its just an X wave ( post which market will again start moving up) c) or its an extension of 'G' leg which is developing as an 'irregular correction'. We had also mentioned that the probability of market starting a new leg on the downside seemed more however todays market post the biggest rally of last 2 months and the sheer momentum and force with which market rallied are suggesting that markets are not yet done the idea of testing higher levels and the last probability (continuation of G leg has become equally probable too).
Single day rally in a bear trend or a single day fall in a bull run usually doesn't mean much and one should not attach too much importance to it but if there is a follow up trading above 10830 levels tomorrows and market sustain those levels then the probability of market continuing this rally and testing higher levels will increase manifolds.
Overall from a positional trading point of view the January month has been pretty frustrating for traders. It started at 10800 levels and ended at 10800 levels too. It just didn't give any trending move/breakout whatsoever. However such period are often expected, I remember Jun'2018 was also one such month last year where Nifty just kept on moving directionless for a month and interestingly levels were similar too (10600-10900). So after a strong trend or after every 7-8 months, its normal to see such a directionless period that's how market tires out traders or frustrate them. One thing that can be said with 100% surety is that such markets do not last forever and sooner or later the real trend begins. More the consolidation bigger the trend that follows. To continue with my June'2018 example last year when the consolidation was over Nifty gave a movement of 1000+ points which was pretty much in one straight line. There were many traders who had given up after getting stopped out for 1-2 times but those who stayed reaped the reward later.
Like They say in cricket, "when a good ball beats you,you should just forget about it and focus on next ball" same applies for trading too. One should forget about yesterday and focus on tomorrow.
Trading recommendations: like I mentioned yesterday if someone is short he can keep a SL of 10830-10840 ( so if one see a follow up buying tomorrow above todays high then he should exit) and if someone wants to go long he can go long above 10840-850 levels (provided those levels are sustained by market). Keep in mind due to budget the SL has to be big (10694)
We keep guiding and advising our subscribers through regular whatsapp updates as to what needs to be done during trading hours.If you wish to subscribe to our live whatsapp Nifty calls/trading recommendation then you may subscribe using below link:
http://niftywaveindia.blogspot.com/2019/01/join-us-on-whatsapp-how-to-subscribe.html
Market update: Nifty had a blast today. It opened with a gap up at 10700 levels and never looked back. Kept rising through entire session and closed at highest point of the day at 10830 up 180 points.
We had mentioned in our previous post that since last 3 months Nifty is playing a familiar script where it falls for 4-6 days and then rises for 4-6 days. So overall there is absolutely no movement and market is just dancing around at same levels in a tight range. After falling for 6 days (and touching 10580 levels) market has now started moving up. It will be interesting to see if bulls can maintain and carry the moment for more than 4-5 days. For nifty to break this tight range of 10500-10900 this 4-6 days of alternate bull/bear moves needs to break as well.
Coming back to todays movement, it was pretty strong and carry a lot of weightage specially since it has come just one day ahead of budget. We had also mentioned yesterday that presently there are 3 scenario developing and its possible that a) either market has started a new leg down or b) its just an X wave ( post which market will again start moving up) c) or its an extension of 'G' leg which is developing as an 'irregular correction'. We had also mentioned that the probability of market starting a new leg on the downside seemed more however todays market post the biggest rally of last 2 months and the sheer momentum and force with which market rallied are suggesting that markets are not yet done the idea of testing higher levels and the last probability (continuation of G leg has become equally probable too).
Single day rally in a bear trend or a single day fall in a bull run usually doesn't mean much and one should not attach too much importance to it but if there is a follow up trading above 10830 levels tomorrows and market sustain those levels then the probability of market continuing this rally and testing higher levels will increase manifolds.
Overall from a positional trading point of view the January month has been pretty frustrating for traders. It started at 10800 levels and ended at 10800 levels too. It just didn't give any trending move/breakout whatsoever. However such period are often expected, I remember Jun'2018 was also one such month last year where Nifty just kept on moving directionless for a month and interestingly levels were similar too (10600-10900). So after a strong trend or after every 7-8 months, its normal to see such a directionless period that's how market tires out traders or frustrate them. One thing that can be said with 100% surety is that such markets do not last forever and sooner or later the real trend begins. More the consolidation bigger the trend that follows. To continue with my June'2018 example last year when the consolidation was over Nifty gave a movement of 1000+ points which was pretty much in one straight line. There were many traders who had given up after getting stopped out for 1-2 times but those who stayed reaped the reward later.
Like They say in cricket, "when a good ball beats you,you should just forget about it and focus on next ball" same applies for trading too. One should forget about yesterday and focus on tomorrow.
Trading recommendations: like I mentioned yesterday if someone is short he can keep a SL of 10830-10840 ( so if one see a follow up buying tomorrow above todays high then he should exit) and if someone wants to go long he can go long above 10840-850 levels (provided those levels are sustained by market). Keep in mind due to budget the SL has to be big (10694)
We keep guiding and advising our subscribers through regular whatsapp updates as to what needs to be done during trading hours.If you wish to subscribe to our live whatsapp Nifty calls/trading recommendation then you may subscribe using below link:
http://niftywaveindia.blogspot.com/2019/01/join-us-on-whatsapp-how-to-subscribe.html
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