To the dot, Nifty closed exactly at the boundary of the cloud. Not even a 0.05 tick above or below; this is why we respect analysis to the core. Now that Nifty has closed exactly at the boundary respecting the cloud, what next for the day? As we noted in the previous day’s note, we believe that inside the cloud, prices tend to be more volatile and hence we could see a down move in today’s session hitting the tenkensen around 8300; just to provide an opportunity to go long in Nifty . There could also be a sideways move for Nifty to wait for the tenkensen to move up towards the prices. In all the underlying trend is positive and any correction in Nifty needs to be utilized for accumulating long. 8600 is what we are looking out as a potential target to this leg up.
Nifty Positional using Renko Model
Renko-100 has gained further strength as we get another positive close above 8400 mark as we discussed in yesterday’s newsletter. We have entered long territory as per Renko 100 model that we follow. As per R-100 model, this could reverse to sell side one we get a close below 8000 mark. Renko modelling that we use (R-100) has generated a Buy Signal on Nifty . As noted “After having witnessed a reversal trade during the month of December; 8000 and 8200 mark becomes most crucial in deciding the next trending phase in Nifty . Unwind your shorts and go long once we get a close above 8200 mark”. After two unsuccessful trades; this could be a trend setter for medium term timeframe going into budget session and state assembly elections.
Given below is our positional trade guidance as per Renko-100 for Nifty and Renko-200 for Bank Nifty .
Scrip Signal Date of Signal Signal Entry C.M.P. Current Position
Nifty (Spot) Buy 05-01-2017 8274 8407 +133
Bank Nifty (Spot) Buy 06-01-2017 18264 18873 +609