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RBI expectations will influence Nifty price action in coming days.

Nifty’s Price action is odd way out – currently ranging near an important resistance level. I got several calls and emails from readers, asking me how I spot potential key levels where price action reacts exactly. There is no magic in such a process, as I have mentioned several times in my articles, support and resistance is the foundation concept. Understanding the dynamics of price action and the way price action shapes the structural support and resistance can help traders to pick profitable trading opportunities.

Currently nifty is ranging at important resistance level 7525.00. One important thing to know is these support and resistance are not actually levels, they’re in fact zones. These zones have potential blocks of liquidity resting beneath them. Right now we can say that potential resistance zone in Nifty is around 7525.00 – 7600.00, which means price action can either hold at this level or break the level.

Nifty’s Price action is odd way out – currently ranging near an important resistance level

One important fallacy in traditional technical analysis is to say that support is the level to buy and resistance is the level to sell. Simply this is not true and traders should always perceive support and resistance as potential levels – means price action can either hold at these levels or break the levels. We should always wait and trade the reactions at support and resistance levels, instead of predicting it.

As you can see in the 4h chart of Nifty, Price action reacts at certain key levels more likely than other key levels. We can refer to these levels as structural levels. Trading structural levels always provides high probabilistic setups and opportunities. Around 29th Feb, price action formed a technical low at previous support level 6850.00. Market rose higher until long-term resistance zone visible at 7525.00. Also we can notice an exhaustion breakout at resistance level 7200.00, again technically this is not a level — it’s a zone. An interesting fact is to see how bullish candles turned smaller and weaker, after the exhaustion breakout. This tells us that, there is no conviction in price movement after the breakout.

Inflation Feb 26

From the perspective of fundamentals, retail inflation report for the month of February was released today. India’s retail inflation eased in February, helped by smaller rises in food prices after edging up for six straight months, raising expectations of a central bank rate cut next month. These expectations of monetary policy may have an impact on Nifty for the coming days. Traders should watch the price action at resistance level 7525.00. In terms of support, keep an eye on 7300.00

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