21 Jul ’23 Post Mortem on Nifty Quite a predictable fall today!
Nifty Analysis
If you had read yesterday’s report, I am sure you would have anticipated the gap down today & the profit taking that followed. Today’s price action may not be a structural change or the start of the next bear rally (at least too early to comment). What I feel is, we have out run the fundamentals & need to give some time for it to catch up so that the next peak can be conquered.
We opened gap down at 19798 and tried to close the distance, but had rejection near the 19880 levels. From there we fell strongly till 12.25 with no signs of retracement or reversal. Once the green candle started forming at 12.30, I drew the Fibonacci retracement levels.
I kept yesterday’s close level as 1 and the intraday low formed at 12.25 as 0 - the purpose was to find if we have a continuation in downfall or a reversal to close the gap.
I did share this on nifty minds - see here.
Was this exercise worth it? Absolutely yes.
1. We saw the reversal at 09.25 came at 61.8% retracement level
2. The lower high formed between 13.30 to 14.00 came at 38.2% retracement level
3. The fall that followed and the break of the 0 level creating a new lower low almost gives us a good confidence that the fall in nifty is quite serious.
Trades taken: I did go short as soon as markets opened to catch the moving bus. This was purely a gut decision and nothing to do with positional strategy. At 12.30 as soon as we had the first reversal of the day, I booked the existing short position & rolled down the option to catch more action. This new position was in loss till 14.15 after which we started falling below the low of the day, assessing this situation - I decided to carry forward the position overnight.
If you had read yesterday’s report, I am sure you would have anticipated the gap down today & the profit taking that followed. Today’s price action may not be a structural change or the start of the next bear rally (at least too early to comment). What I feel is, we have out run the fundamentals & need to give some time for it to catch up so that the next peak can be conquered.
We opened gap down at 19798 and tried to close the distance, but had rejection near the 19880 levels. From there we fell strongly till 12.25 with no signs of retracement or reversal. Once the green candle started forming at 12.30, I drew the Fibonacci retracement levels.
I kept yesterday’s close level as 1 and the intraday low formed at 12.25 as 0 - the purpose was to find if we have a continuation in downfall or a reversal to close the gap.
I did share this on nifty minds - see here.
Was this exercise worth it? Absolutely yes.
1. We saw the reversal at 09.25 came at 61.8% retracement level
2. The lower high formed between 13.30 to 14.00 came at 38.2% retracement level
3. The fall that followed and the break of the 0 level creating a new lower low almost gives us a good confidence that the fall in nifty is quite serious.
Trades taken: I did go short as soon as markets opened to catch the moving bus. This was purely a gut decision and nothing to do with positional strategy. At 12.30 as soon as we had the first reversal of the day, I booked the existing short position & rolled down the option to catch more action. This new position was in loss till 14.15 after which we started falling below the low of the day, assessing this situation - I decided to carry forward the position overnight.
