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indiamarketoutlook
May 4, 2020 5:07 AM

Nifty: Listening to chart can reward you handsomely... Long

NSE:NIFTY1D
Nifty 50 IndexNSE

Description

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Nifty
Cmp 9419

Read this to understand the power of Technical Analysis



- There I had shown 4 charts Dax , Taiwan, Dow Jones, Hangseng to give me the confidence that Nifty has a high probability of testing 20 day EMA.

- 20 day EMA is currently around 9250 odd levels.

- So the message was loud & clear. a potential of 500-600 point drop in Nifty

- do notice the analysis was not on the week end after seeing SGX NIFTY deep in the red but at a time when things were going good.

- Charts do tell us a lot and it's up to you whether you want to listen to them or trade on News when most of the cream has already been taken

- going forward for us the play on short side is done for time being.

- we are looking at opportunities to sell 07 May expiry Nifty 9000 Put option as our trading strategy with 20 day EMA being our guiding factor.

Happy & safe trading...!!!

Comment

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As was suggested Nifty did come close to 20 day EMA.

9000 PUT OPTION gave ample opportunity to sell above 82. Current price 30

The strategy worked well. Providing ample safety as well as giving decent profits.

Patience is the keep. Wait for your levels to come.
Consider booking profits & enjoy your day...!!!

Happy trading :-)
Trend AnalysisMoving AveragesNIFTYtradingview
Comments
NitinDhanrajani
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At what levels we should book this put..
Also it is necessary to buy back put if it is above 9000 on 7th May expiry
indiamarketoutlook
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@NitinDhanrajani, as a risk management tool it is recommended to book partial profits when 50-60 % of the target is achieved. For eg in our case we sold at 82 and booked profits when the price was around 30 (we booked completely in this case) which is kind of 65% of the fall.

Answering your 2nd question, if Nifty closes any where above 9000 on 07May, then you don't have buy back. It expires worthless at 0 and you save on your brokerage.
NitinDhanrajani
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@indiamarketoutlook, Thank you very much for clearing my doubts..
vlakeshri
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It's good analysis and result. Can you please tell me about Ashok Leyland shares..It will up or down. CMP is 49.30
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