technical analysis on nifty by way2profits

Ride with Trend, Not with Perceptions.

Weekly Outlook

Nifty as on 22th March, 2013 – 5651.35

Week begins with opening gap down straight away at 5816, and remained below this level for whole week. Sometimes it becomes difficult to trade in such type of situation, where many thing comes at a place and traders get confused whether to take short position or not, because our sell level was 5835. Anyways, if you have confidence on your system than you should not doubt on your system in any given condition, but this confidence only comes with experience. On Monday morning only, few of my readers called me and asked me whether we should wait or sell, and my answer was straight, below 5835 there is no meaning to think twice, only concern was stop loss, and I asked them to put stop loss at 5861 previous day’s low, and then after they managed the position. Then after I got to know that they take early exit in profit, and could not ride the profit, anyways it happens with everyone, including me.

Coming to recent development, as you can see there is clear cut positive divergence between price and RSI (14), and now we have to see whether it honors the divergence or not. I sense it will, but it has still potential to go down further, so rather taking early call we should wait and look at Monday’s price action.

Strategy should be like this, if prices manage to stay above 5670 in first half than, you take long position, and if Nifty moves below 5650 than you can take short position with stop loss of previous day’s high i.e. 5695 level.

Last week, I was expecting Nifty to turn positive, but it moved reversed, anyway I was prepared for that. I know you will be thinking that, now what my stand is? As last week I have mentioned that I am not extremely Bearish on Market and still I maintain my stance, but if Nifty moves below 5550 and gives close below this level than I have reason turn extremely cautious and I will turn extremely bearish below 5400, yes levels are far from here, so you have leeway till that point.

But lastly I would suggest you should Ride with trend, not with your Perceptions.

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