Friday, October 21, 2011

Weekly Trading Levels for Nifty

Dt: 21-Oct-2011

Hi,

Today we could catch both bull and bear moves with our pre-defined trading levels.

Morning session gave a good 15 pts on short side from 5085 to 5070
Market took a pause at around 5120 and reversed. As per our rule, we had gone long at 5110 and got stopped out at 5095. So that took away 15 pts.

Next trade triggered when 5070 broke hence giving us a good entry point to short the market reaching our targets of 5055. The second target of 5035 was missed by just 3 pts.

We ended up with a gain of 5070-5049 = 21 pts for the day.

Next week is Diwali & also F&O expiry week. Market may remain volatile so trade with caution and strict stop loss.
Market will remain closed on 26th and 27th Oct. Muhurat trading will be for 1 hr on 26th Oct.
Last year on Muhurat trading day, 5th Nov, Nifty touched the 52 week high of 6330. What is going to happen this time?

Let us see what our weekly pre-defined trading levels look like:

Nifty price levels for the week are:

Top reversal region      : 5090-5130
Typical Price: 5050
Bottom reversal region : 5010-4965  

How to trade? Monitor price closely and see which side is getting weaker and trade against it.

Trading the Top Reversal region:
1. if Nifty reaches in the Top reversal region, but is unable to trade above 5130, that means the bulls are becoming weak. look for shorting the market once it falls below 5090, Target will be 5050 & 5010, Stop Loss (SL) will be 5130.

2. if Nifty reaches in the Top reversal region, but is unable to trade below 5090, that means the bears are becoming weak. look for going long the market once it crosses 5130, Target will be 5170 & 5210, SL will be 5090.


Trading the Bottom Reversal region:
1. if Nifty reaches in the Bottom reversal region, but is unable to trade below 4965, that means the bears are becoming weak. look for going long the market once it cross above 5010, Target will be 5050 & 5090, SL will be 4965.

2. if Nifty reaches in the Bottom reversal region, but is unable to trade above 5010, that means the bulls are becoming weak. look for shorting the market once it falls below 4965, Target will be 4930 & 4890, SL will be 5010.


Stock Update: 
PETRONET LNG, CMP = 164, Up 2.5% from our entry price of 160.
Revise stop loss from 154 to 162.

Wish you a Very Happy Diwali & Prosperous New Year.
P.S. There will be no Market update upto 27th Oct. Market updates on this blog will resume from Friday, 28th Oct.