Recent developments in Nifty are still intact with my previous update. Market participants are focusing on Economic reports and global developments. Geopolitical uncertainty casts some doubt on global shares and stock indices. The resistance zone around 7500.00 – 7600.00 is tested and still the price action is not clear. In terms of fundamentals, economic reports which indicate potential RBI rate cuts will influence the market sentiment.
Below mentioned is the Daily chart of nifty – Kindly take a look for complete understanding
I have used heikenashi candlesticks instead of normal candlesticks to smooth out Nifty’s market structure. Heikenashi candlesticks have both advantages and disadvantages. As with any trading method, the application is subjective and depends upon trading style and time frame.
Price action crossed above 25 period EMA, which indicates a trend change scenario – but traders should be careful and aware that earlier trend change signals resulted in breakout failures. Retail traders, especially intraday retail traders are long and trapped, even a minor selloff’s will cause them to liquidate orders. Also notice that resistance level 7600.00 is Multi time frame level or shortly referred as MTF, this means it’s visible to large number of market players – hence subjected to pattern traps and failures.
If bulls are strong enough then we should see decent pullback at resistance zone 7500.00 -7600.00 signaling a clear breakout and buying pressure. From an opposite viewpoint, possibilities of breakout failures still exist; hence traders should take this consideration on their risk management.
This analysis is applicable for swing trading and Position trading, Traders should focus on price action at resistance zone 7500.00 – 7600.00. Respective decision points are around 8000.00(R) and 7250.00(S).
