Read how one can look to trade Nifty in coming week.
A short week ended on 13 Apr could bring Nifty to levels near 7900. Small corrections are bought in. Bigger corrections are bought even more aggressively. This is a symptom of typical uptrend. World markets were green too.
How to trade this up-trend if you are late to enter.
Technical Overview: Last week Nifty made a high of 7864 and low of 7516 to close at 7850. That was range of 348. Last week formed a bullish engulfing green candle on weekly chart. In an uptrend charts form a cycle of higher high and higher low. One such cycle, as we had discussed in earlier posts, is under formation on Nifty daily chart. What is important to understand here, though Nifty is in uptrend, is that now it has reached its higher end. Nifty is now trading near its resistance.
Resistance is near 7863 and 7890 and 7972.
New supports are formed near 7718 and 7660 and then at 7590.
My View: We had talked about last quarters high at 7972. This is one of major resistance to Nifty. Secondly Nifty is now trading at high end. From here it deserves some correction. A correction does not mean that Nifty will start outright moving down. Current resistance may be tested couple of times before Nifty moves down. Nifty may remain in range near current level for some time. However, one thing is for sure, Nifty is too stretched to buy at this level. Let it correct a bit to buy on dips.
Nifty options have already started giving some indication of a correction from current level. Aggressive traders can buy Nifty puts near current resistance. One needs to understand that buying Options is very tricky as entry and exit actions need to be fast and precise.
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