Range - 19549/19780
Extended range - 19465/19862
Below average volume on 2nd consecutive day yesterday tells that traders are being cautious & waiting for clarity on the government shutdown issue in the US. Rising dollar index & US bond yields are another reason of concern. Nifty is likely to test the bottom of the channel and touch 19600 which is a strong support. If this level holds, we can see a bounce of around 100 points from this level. Chartically, risk reward is in favour of bulls unless 19600 is broken down on a 4 hour time frame.
Possible trade for today (do not carry) -
1. If 19600 holds on 1 hour chart, buy Nifty Oct Future and hedge it by selling 28 Sep 19850 CE.
2. Else, once Nifty is stable, create a short strangle with selling 5 Oct 19350 PE and selling 5 Oct 19900 CE. You can collect around Rs. 60/- by selling this pair. Book profit at 10-15 points and keep a strict SL of 10 points.
Extended range - 19465/19862
Below average volume on 2nd consecutive day yesterday tells that traders are being cautious & waiting for clarity on the government shutdown issue in the US. Rising dollar index & US bond yields are another reason of concern. Nifty is likely to test the bottom of the channel and touch 19600 which is a strong support. If this level holds, we can see a bounce of around 100 points from this level. Chartically, risk reward is in favour of bulls unless 19600 is broken down on a 4 hour time frame.
Possible trade for today (do not carry) -
1. If 19600 holds on 1 hour chart, buy Nifty Oct Future and hedge it by selling 28 Sep 19850 CE.
2. Else, once Nifty is stable, create a short strangle with selling 5 Oct 19350 PE and selling 5 Oct 19900 CE. You can collect around Rs. 60/- by selling this pair. Book profit at 10-15 points and keep a strict SL of 10 points.
Trade closed: target reached:
Nifty bounced exactly from bottom of the range 1 and closed within the range forecasted.