Nifty, Nifty, Nifty!!!!

Jul 28

Wanna see an interesting thing?

This is #Nifty's PCR Ratio (posted on X) which was up on Intraday which is negative sign.

Now another thing is Banks and Financial companies have 35% weightage on nifty, collectively.

And PSU Banks posted great results. Hence Banknifty looks strong. And as Banknifty is strong so is Nifty bcz of the weightage shared.

Now we have contradictory view = 1. Technical Data says - Negative. 2. Macro says - Positive.

Plus, all the stocks in Nifty almost looks overbought. Which indicates a correction is needed.

Now we have 2 negative points and 1 positive. Right?

Now Friday's upmove was a short-covering move and not long buildup. FII is still there with 34% short positions open in Index.

So unless the friday's move scares them away and they exit their shorts, a new high on Nifty is hard to come. And we need it to come.

Now we have 3 negative and 1 positive.

So what to do now?

Completely avoid Index trading for next 2-3 days. Watch and observe if Bulls are able to scare away the bear with New high with a closing basis.

If that happens, we will enter in 2nd phase of trend. You remember i told you how many phases a trend has in that #RVNL video? Yeah, so you got it what I am saying!

However, when Intraday data is Negative and Macro data is positive, so what to do in this situation? How to trade?

Well, a correction is needed to ensure bulls continues and that is pending. If that happens, don't immediately enter in shorts. Wait and watch if market makes a reversal from its 20DMA. If that happens, we start adding longs and enjoy the run. If not, we better take our SL and wait for this tug of war to settle.

Remember, in the market stock is not your friend but the STOP.

Take care.