Last week has been a bleeding reminder of how a stock market trading is. Both systematic and discretionary traders have been hemorrhaging cash and are now dealing with a drawdown of 5-35%. So you can consider that the dream run is over and we need to wake up.
On the last trading session, banknifty managed to close in green but nifty failed to do so.
Markets are reacting to geopolitical factors and not charts. However, we are struggling to stay inside the upward moving channels. There is head shoulder pattern in both indices and daily RSI is staying below 50. To add to the misery, the 21 weekly EMA is working as a good resistance and both indices are trading below that. So implications are more on the bearish side. But there are some stuff happening in the crude oil side.
Chart patterns suggest that crude oil might have just topped out at around the 96 dollar mark. If the geopolitical factors cool down, crude oil might take a dump. This would have a positive impact on the markets. So implications are bullish if global factors support.
So what can we expect next week? Range bound action can be expected with huge volatility which has been the recent trend. Option data suggests Nifty range to be 16800-17800; Banknifty range to be 37000-38000. But take this with a pinch of salt as option data changes in the blink of an eye now a days due to some huge movement in one side leading to a short covering rally. I have suffered a lot due to this reason.
Points to be noted
1. If Nifty trades below 17230, further downfall can be expected.
2. Banknifty has very strong support at 37350 which is likely to hold. In case of a break down, huge short covering in puts can be expected leading to a 1000 point fall.
Positive News: India-UAE trade agreement will have a positive impact on the market especially on stocks concerned withpetroleum products, precious metals, stones, gems and jewellery, minerals, food items -- such as cereals, sugar, fruits and vegetables, tea, meat, and seafood -- textiles, engineering and machinery products, and chemicals.
My two initial picks would be Reliance and Asian Paints (need further research)
What to trade? Selling 38500CE and 17800CE would be safest options for next expiry. Positional trades can be done in petroleum stocks.
On the last trading session, banknifty managed to close in green but nifty failed to do so.
Markets are reacting to geopolitical factors and not charts. However, we are struggling to stay inside the upward moving channels. There is head shoulder pattern in both indices and daily RSI is staying below 50. To add to the misery, the 21 weekly EMA is working as a good resistance and both indices are trading below that. So implications are more on the bearish side. But there are some stuff happening in the crude oil side.
Chart patterns suggest that crude oil might have just topped out at around the 96 dollar mark. If the geopolitical factors cool down, crude oil might take a dump. This would have a positive impact on the markets. So implications are bullish if global factors support.
So what can we expect next week? Range bound action can be expected with huge volatility which has been the recent trend. Option data suggests Nifty range to be 16800-17800; Banknifty range to be 37000-38000. But take this with a pinch of salt as option data changes in the blink of an eye now a days due to some huge movement in one side leading to a short covering rally. I have suffered a lot due to this reason.
Points to be noted
1. If Nifty trades below 17230, further downfall can be expected.
2. Banknifty has very strong support at 37350 which is likely to hold. In case of a break down, huge short covering in puts can be expected leading to a 1000 point fall.
Positive News: India-UAE trade agreement will have a positive impact on the market especially on stocks concerned withpetroleum products, precious metals, stones, gems and jewellery, minerals, food items -- such as cereals, sugar, fruits and vegetables, tea, meat, and seafood -- textiles, engineering and machinery products, and chemicals.
My two initial picks would be Reliance and Asian Paints (need further research)
What to trade? Selling 38500CE and 17800CE would be safest options for next expiry. Positional trades can be done in petroleum stocks.