Nifty & Bank Nifty Trading Strategy as on 02 May’13

nifty doji -way to profits

Nifty as on 30 Apr’13 – 5930.20                       Bank Nifty as on 29 Apr’13 – 12561.55

Nifty moved as per expectation, opened at 5930, moved above 5940 and posted a high of 5962.30 and panic selling button triggered, made a low of 5867.80 and again moved higher. What a roller coaster ride. Finally Nifty settled at same level where it opened, which gave us a candle of Doji.

Doji at important resistance level is clear signal of fading momentum, but to confirm the fact we need subsequent weak close.

Nifty Trading Strategy

From above observation it is very clear that Bulls are not totally in charge, at this point in time. Nifty moved as per my expectation, but also we should note that it get strong support from lower levels too. So we should take both this factor in consideration. Traders have to be move smartly at this point in time. I would recommend my readers for taking Long Strangle option trading strategy.

Buy 600 CE @ 56

Buy 5800 PE @ 49

Total = 105

Investment is 105×50= 5250.

This strategy will give you good money once Nifty moves sharply in either direction. Traders can keep the financial stop loss of 30/40 according to individual risk taking capacity. Strategy will fail if Nifty expires within range of 5800 to 6000.  But, I sense that Nifty can give some wild movement in days to come, in either direction.

Bank Nifty Trading Strategy

In last session Bank Nifty initiated my short call by crossing below 12470 and 12450, but it made a low 12402.15 and reversed. I had advised my readers to buy 12200 PE which lastly closed at 235; I continue to hold this put option with stop loss of 30/35.

I maintain my stance, and would like to stay bearish on Bank Nifty. My attention will turn bullish only once Bank Nifty moves above 12700-12750 level, below which I am bearish.

P.S. – Medium term bullish trend remains intact, and current technical pullback should be utilized for buying opportunity, as we see some reversal signals on the chart.

 

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