NIFTY Wait and watch
Let's first review the current swing from 14151 to 15800.
This swing is 8 weeks old without any significant pullback.
It has covered around 11.5% in 34 trading sessions.
It is in a significant resistance area 15800-158900. This is because this area has multiple measured move targets used by traders.
VIX has dropped 37%.
It created ATH after 103 trading sessions.
In the same period, NIFTY 500 stocks broader index has 13.5%, which shows broader market participation.
Many penny and junk stocks are rising in this rally which indicates participation by speculative betters.
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On shorter time frame,
1. Ability to exceed previous high by margin is diminishing.
2. Pullbacks at technical levels.
3. Option buildup on both sides and near strike prices even at lower premiums.
Taking view
1. NIFTY looks tired and can enter in multi day topping process.
2. A sudden jerk if there is some bad news.
3. Consolidation before making ne highs.
Actions
1. I'll avoid any longs here, not even intraday except exceptionally bullish conditions.
2. I wont short till close below 15660.
3. Patiently watch market action.
Possible trades
Look for weak stocks and have intraday shorts during the week, increasing # as the week progresses.
Levels to watch for are marked on the chart. Resistance building up at shorter levels and Supports are at the wider levels.
This swing is 8 weeks old without any significant pullback.
It has covered around 11.5% in 34 trading sessions.
It is in a significant resistance area 15800-158900. This is because this area has multiple measured move targets used by traders.
VIX has dropped 37%.
It created ATH after 103 trading sessions.
In the same period, NIFTY 500 stocks broader index has 13.5%, which shows broader market participation.
Many penny and junk stocks are rising in this rally which indicates participation by speculative betters.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
On shorter time frame,
1. Ability to exceed previous high by margin is diminishing.
2. Pullbacks at technical levels.
3. Option buildup on both sides and near strike prices even at lower premiums.
Taking view
1. NIFTY looks tired and can enter in multi day topping process.
2. A sudden jerk if there is some bad news.
3. Consolidation before making ne highs.
Actions
1. I'll avoid any longs here, not even intraday except exceptionally bullish conditions.
2. I wont short till close below 15660.
3. Patiently watch market action.
Possible trades
Look for weak stocks and have intraday shorts during the week, increasing # as the week progresses.
Levels to watch for are marked on the chart. Resistance building up at shorter levels and Supports are at the wider levels.
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