Bank Nifty & Nifty Trading Strategy for 21 June’13

Nifty as on 20 June’13– 5655.90 (-166.35)    Bank Nifty as on 20 June’13– 11375.40 (-477.25)

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It was expected that Nifty and Bank Nifty will either open gap up or gap down, and finally, we don’t need to wait for opening, global markets were trading on weaker note, which was very obvious signal that market has to open gap down. Similarly, Bank Nifty opened 11677.35 and that was the high for the day, made a low of 11347.55.

Nifty Trading Strategy

Nifty, opened at 5754.15 quite below 5775 (selling initiation point), and finally made a low of 5645.65, just below our expected support level of 5650. We hope traders must have bought some puts in the sharp sell-off.

What Next??

After yesterday’s sharp sell-off, Nifty is showing divergence, but on weekly basis momentum is still weak. So in this situation, we can’t rule out minor pullback in Nifty, but gains can capped near 5740 level. If, barring first hour of the session Nifty stays below 5650 level, than expect Nifty to test 5480, but we would recommend you to don’t carry any position, it is better book profit and exit, and that is also before 3 p.m.

Bank Nifty Trading Strategy

To trade in Bank Nifty you need a big heart, isn’t it? What a sharp sell-off? Similar to Nifty, Bank Nifty also shows some divergence on daily charts, which indicates minor pullback, but weekly chart shows some more weakness on cards. In that case, traders can either go short below yesterdays low, downside target still opens at 11000, or wait for right signal to take any position. Another method is to being contrarian, and Buy Bank Nifty, but that suits to large institutional clients; I know my readers.

At Way2Profits, we always give you unbiased view. Please, don’t take our ideas as trading recommendations, it is just for educational purpose only, and we don’t accept any responsibility for the same.

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