Medium Term Trend: ↑UP (down below 11550)
Choppiness Continues: It was again a familiar site today, after dropping to around 11650 levels in early trade, Nifty started moving upwards and didn't look back. It hit a high of 11815 & closed at 11795 up 95 points.
Current trading environment must be appearing very frustrating to many traders especially after seeing Nifty running like a headless chicken (100 points up one day and 100 down the very next day).We do agree that for extremely short term this may be a difficult period but in long run this could prove to be an excellent trading opportunity. Like we have been saying for last few days that (in all likelihood) markets are preparing itself for a big move and right now its just trying to get rid of day traders and weak hands ( both on the short and long side) and only when short term traders are fully frustrated and exhausted completely, it will start moving in a strong trend. Market knows only one way to frustrate and shake the belief of small traders and this is how it does it.
As a traders one needs to be patient and stick with the markets in such times & only those who don't get frustrated, keep trading with discipline & with strong belief will be able to reap the rewards later. Its not easy to stick with your position when one knows that a counter move of 100-200 points can come at any time. But that is precisely the point.
So technically speaking, Nifty again moved from 11650 levels however thing to note is that ever since market hit a high of 12103, its been in a corrective mode and making lower lows and lower highs. Now today it hit a low of 11650 which is a higher low, the recent high of Nifty was at 11845 and if markets can cross above 11845 tomorrow ( and sustain) then that will signify two things
If we do see a sustainable move above 11850 tomorrow then probably it would be an indication that correction we have been seeing since last 2-3 weeks is probably coming to an end. But mind you Nifty still has a very strong resistance at 11940-975 range and if it manages to cross it then in all probability 12100 can be tested again. Also Keep in mind that Dow hit its 52 week high and since last 2 days hovering around that level. Seeing how US markets trades around its all time high could give further clues about what Nifty is going to do in days to come.
Just to summarise, to indicate bullishness , Nifty needs to cross above and sustain above 11845 levels and 11940-975 levels after that. On the other hand if Nifty start slipping again tomorrow then 11730-720 is the level to watch out for and if that breaks nifty can again slip to 11600-1650 levels.
Happy Trading!
Choppiness Continues: It was again a familiar site today, after dropping to around 11650 levels in early trade, Nifty started moving upwards and didn't look back. It hit a high of 11815 & closed at 11795 up 95 points.
Current trading environment must be appearing very frustrating to many traders especially after seeing Nifty running like a headless chicken (100 points up one day and 100 down the very next day).We do agree that for extremely short term this may be a difficult period but in long run this could prove to be an excellent trading opportunity. Like we have been saying for last few days that (in all likelihood) markets are preparing itself for a big move and right now its just trying to get rid of day traders and weak hands ( both on the short and long side) and only when short term traders are fully frustrated and exhausted completely, it will start moving in a strong trend. Market knows only one way to frustrate and shake the belief of small traders and this is how it does it.
As a traders one needs to be patient and stick with the markets in such times & only those who don't get frustrated, keep trading with discipline & with strong belief will be able to reap the rewards later. Its not easy to stick with your position when one knows that a counter move of 100-200 points can come at any time. But that is precisely the point.
So technically speaking, Nifty again moved from 11650 levels however thing to note is that ever since market hit a high of 12103, its been in a corrective mode and making lower lows and lower highs. Now today it hit a low of 11650 which is a higher low, the recent high of Nifty was at 11845 and if markets can cross above 11845 tomorrow ( and sustain) then that will signify two things
- A) Higher high- Which will be a +positive change and after making a series of lower high this will be the first higher high in a long time.
- b) Emergence of follow up buying: Till recently Nifty has failed to sustain above previous day high and always moved down next day (after a strong day of upmove).Follow up buying above todays high will again be a +ve change
If we do see a sustainable move above 11850 tomorrow then probably it would be an indication that correction we have been seeing since last 2-3 weeks is probably coming to an end. But mind you Nifty still has a very strong resistance at 11940-975 range and if it manages to cross it then in all probability 12100 can be tested again. Also Keep in mind that Dow hit its 52 week high and since last 2 days hovering around that level. Seeing how US markets trades around its all time high could give further clues about what Nifty is going to do in days to come.
Just to summarise, to indicate bullishness , Nifty needs to cross above and sustain above 11845 levels and 11940-975 levels after that. On the other hand if Nifty start slipping again tomorrow then 11730-720 is the level to watch out for and if that breaks nifty can again slip to 11600-1650 levels.
Happy Trading!
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