In this newsletter read about my view on Nifty. I would want to bring your attention to Banknifty as well.
It is not easy to trade when markets are highly volatile. Last few days markets experienced high volatility. Volatility is expected to continue as we have a event (Central Budget) lined up on 29 Feb.
So how to trade this volatile market?
Technical Overview: Last week Nifty made high of 7512 and low of 6869 to close near low of week at 6980. A huge range of 643 points to form a big red candle. An expanded range candle like this one exhibit a force on that side. In this case bearish force.
Nifty has been falling continuously for last 5 days. Now it is trading in oversold zone as well as near a long term support. Nifty is also trading near demand zone and trend line support on monthly chart. I am attaching a monthly as well as daily chart with this post. This will help us understand long term and short term view.
On friday Nifty bounced from monthly demand zone at 6670-6650. This area is a good support zone for Nifty.
New resistance is formed near 7200.
Concern about Banknifty: Banknifty has broken out of a strong support near 14300. Next support to Banknifty is at 13270. If Banknifty has to travel to say 13300, Nifty would find it difficult it to sustain at current level.
My View: This is a level where bears would like to book full profit. This is also a strong level for bulls to enter in the game. This does not mean Nifty will start an outright up-move. Reasons like Banknifty, upcoming budget and high volatility may not allow nifty to settle fast. Expect volatile trading ahead.
Wise man's act: For long term investors most stocks are trading at attractive level. This can be right time to enter markets from long term perspective. Time to come can be dominated by large cap stocks.
I find following stocks attractive- Asianpaint, Axisbank, Pidiliteind, Bergerpaint, IGL, Kotakbank, Indusindbank, Hexaware, Maruti, SKSMicrofin, Apollohosp
Note: Do not consider these as buy or trade recommendations.
Check the influence areas (supports and resistance on chart below)
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