How to trade budget week – Nifty View 29 Feb-4 March

Read this newsletter to understand how to trade Nifty in budget week 

Last week Nifty went with primary the trend, to move down. It didn't trade in green even for one day last week. View about larger upside (which I had given last week) was negated by down-move on last Tuesday itself. Cues form global markets remain positive.  

How do we approach budget week?  

Technical Overview: Last week Nifty made high of 7252 and low of 6961 to close near low of week at 7029. A range of 291 points. Last week's green candle is negated by Nifty by forming a bearish engulf this week. However Nifty is trading near support zone. India VIX is trading near 22 which is considered to be high volatile area.  

Nifty has resistances at these levels- First- 7110-7144, Second- 7200-7252, Third- 7363-7422.  

Supports are – First- 7969, Second- 6869, Third- 6650 

My View: Usually, important events are instrumental in reversing the ongoing trend. It would be interesting to see whether Union Budget can do this to Nifty. More so as Nifty is trading near support and is in oversold zone. Do not forget that on a larger scale the lower end of the support is at 6650. Volatility on budget day can easily take Nifty down to that level. If trend is to reverse, chart will give us clear indication with substantial movement on upside. Banknifty will play crucial role here. It has support only at 13268. Question is- can budget volatility take it (Banknifty) to that level and bounce back from there? 

Note: Do not consider these as buy or trade recommendations.  

Note on our consultancy products:  

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Check the influence areas (supports and resistance on chart below)