Nifty Technical Analysis And Trading Strategy

NIFTY is currently consolidating at or around 5600 before getting ready for a big move in either direction. It is waiting for the cues from the winter session of parliament where many important bills will be passed including the clarity on FDI in multi retail. Regardless of bearish set up (bearish butterfly pattern) where the PRZ (Potential Reversal Zone) is 5915, it is holding on FII support and increase in investment limit for LIC. Though there are no bullish cues at this stage, any positive news will cheer the market and push Nifty strongly pass the current resistance of 5655. In that case, a possible trade setup is given below where it can reach as high as 5885 to 5933. This zone should be treated as a reversal zone which matches with the PRZ of the bearish butterfly pattern.

Nifty Technical Analysis And Trading Strategy

Now does it mean that this zone will act as a magnet and pull Nifty upwards? Well it’s very difficult to predict. But one can buy this argument provided Nifty closes above 5655 handsomely and marches upside on some local positive news. In case of no positive news from the parliament on reforms, there is a huge risk of withdrawal of FII support which could trigger a sell off on fears of sovereign rating downgrade in the near future. In that case, a very modest target could be 5350-5330 as stated earlier in the post on Nifty.  In that scenario, I will update a bigger picture for downward targets.

Now it’s your turn…..

Feel free to share your experience and thoughts in the comments area.

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This entry was posted in Analysis, FnO, Indices, Nifty-Bank Nifty, Positional Trading, Posts, Technical Analysis, Trading, Underlying. Bookmark the permalink.
  • Mujahid Khan

    this scenario is still continued in sideways correction till now. I’m expecting a downtrend now which may go below 5000 levels. Political issues is going show big impact on long term downside targets Nifty wala

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