I am bullish on Nifty till it reach around 8400 level. This is a short term target
Here are the list of reason for my conclusion:
Futures for near month can be held. The risk reward is of 3.12 which is good.
Here are the list of reason for my conclusion:
- The the most recent wave seem to correct at fib level 1.618. Breach below that would mean that market would have to test 7700 level which seem irrational and panic driven. The market would most likely go up.
- The expiry is next week which would mean there is most likely a price action
- My personal bias that market has corrected too far from the trend-line which would mean it should go back and retest it. it is more approx. 350 pts
- There is a strong support at 8450 level. This is about 350 points away from where we are now. Thus this gives us a fairly good area to target for where wave 4 should end.
- Wave 3 end was confirmed with 1.618 fib retracement this is signalling that wave 3 has ended and now wave 4 should start. Wave 4 should go back to 8550 to 8400 as per Elliott wave theory.
- There is a consolidation at the bottom right now this signals support here.
- The stoploss is around 7975 area which is a support level as seen on 6/24 and 4/28 and last year at 12/30 and 12/2.
Futures for near month can be held. The risk reward is of 3.12 which is good.
Comment:
I am keeping this trade. Now since this level 8000 has been broken market may test 8730 level and if that breaks 8530 level is possible. There may be a rebound when markets go back and test the 8000 level but since markets seem to be following trendline, we have to wait for a while now. There was also a small uptick in the implied volatility today.
Comment:
The uptick in volatility means out of the money puts are being bought. Since this expiry week, most likely it is near month's options. Thus this glut may continue till the middle of next month at the most because that when extrinsic values are going to start falling the fastest.
The question is when to enter the trade?
We should be able to enter the trade when the market touches 8730 levels.
The question is when to enter the trade?
We should be able to enter the trade when the market touches 8730 levels.
Comment:
Markets are at 7965 and i think if the major support level of 7940 is broken further downturn could be expected.
Comment:
Regardless of if the trade goes to 7700 i will hold it. I can survive the swing. This loss is also more or less hedged by TCS short.
