Saturday, October 10, 2015

Higher end of Swing, What Next?- NIFTY View For Week 12-16 Oct

Last week finished on a positive note. Global markets were supportive to bulls. As a result most world markets ended in green. Nifty was no exception. Markets have reached to higher end of Swing. What next?   
                                                                                      
 Technical Overview: Last week Nifty made high of 8232 and low of 78005. A range of 318 points. Like last week, this week too, Nifty closed near high of week, suggesting bulls have better control- at-least for the time being. However Nifty now trading near good Supply area, where bears can surprise bulls. 

As I had mentioned in last week's post, if Nifty crosses 8091, it has next hurdle at 8225-8322. This hurdle is still intact. unless Nifty crosses 8322 we cannot assume medium-term uptrend to be resumed. At current level Nifty formed nice doji suggesting a equal fight among bulls and bears. The levels are shown in the chart enclosed. 

This is what I feel. Nifty to take resistance at current level and move down to around 8000, then resume the uptrend again. Overall picture is positive and this is buy on dip market, unless it breaks 7700. 

Aggressive traders can go short in Nifty at current level with stop-loss of 8322 and target of around 8000. This trade becomes more authenticate if Nifty gaps down on Monday.     

F&O lot sizes are increase from Nov series. It would be difficult for small traders in Futures as the margin requirements will be almost tripled from current level. 
This is what you can do to continue the trading if your margin is limited. 
  1. Hedge Futures lot with options- this reduces the margin requirement 
  1. Trade in Options with hedging 
  1. Trade in Options only on long side (Buy Options) using Demand Supply theory 
Using Demand Supply theory in combination with Volatility Index (India VIX) one can Buy cheap Options. 
I teach Demand Supply theory which helps taking trades with great accuracy in my One Day Crash Course on Demand Supply.  
Last Week I took 3 trades in Futures using Demand Supply in my Prime Future portfolio. All 3 closed in Profit with net gain of Rs 17117/-. This portfolio currently needs investment of Rs 200000. Hence total gains in just one week are 8.55%. Click here to see the detailed trades. 

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