Nifty Trading Strategy as on 29 Apr’13

Nifty as on 26 Apr’13 – 5871.45

Nifty as on 26 Apr’13 – 5871.45

Bank Nifty as on 26 Apr’13 – 12533.15

Bank Nifty as on 26 Apr’13 – 12533.15

Week ended on a negative note, but week on week basis Nifty and Bank Nifty closed with gains of 88.35 and 244.90 respectively.

As depicted in attached chart, Nifty closed with candle of Harami, which is clear cut indecision amongst market players, and first signal to alert us that existing trend may not continue further. Also there is negative divergence set in between Price and RSI (14), which developed near overbought territory, in Nifty and Bank Nifty both.

Nifty Trading Strategy

Once Nifty moves below 5850 level, traders can initiate short call with stop loss above 5910, initial target would be around 5800 and if prices moves below this level than next target comes around 5735 level. Risk-reward is not much favorable, but it is like this only. Alternatively, long position opens above 5925.

Previously given 5900 CE option closed at 86.30, it is advisable to exit from this position, considering setting weakness in Nifty.

(Previous Strategy – Nifty Trading Strategy as on 26 Apr’13 )

Bank Nifty Trading Strategy

Once Bank Nifty break Friday’s low of 12470 and crosses 12450, than traders can initiate short position with stop above 12700. Initial target comes near 12000 and next 11800.

I asked risk-averse traders to exit from 12900 CE, and it also hit 30 Rs stop loss from cost price.

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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