Those who are following me know that my earlier Nifty target of 9460 is already done. If you have missed my last Nifty target analysis read this post: The Easiest Method Of Calculating Nifty Target For April Expiry. After Friday’s trading I was looking at the Nifty weekly charts and one thing struch in my mind. I felt Nifty trend reversal can be possible at least for the short term. Nifty resistance for short term likely at 9550.
Why is Nifty trend reversal likely?
So what does Nifty weekly chart reveal? You can check Nifty weekly candle is touching upper bollinger band and has formed a doji candle OR semi inverted hammer candle in the weekly chart. It denotes that Nifty has reached resistance area and a correction is expected. Daily stochastics indicator is in sell mode and that confirms the bearish view.
The initial target can be close to 9250 as the daily lower bollinger band is at 9231 now. So this is almost a 200 points target as current market price is at 9427.90. What can be the stop loss if anyone short sells Nifty? The stop loss can be kept above 9535 as the high of this week’s candle is at 9532.60. So this is a decent risk reward ratio a 100 points stop against a 200 points target.
So will you jump and short sell Nifty on Monday morning? In my more than 2 decades of experience in the stock market I have found traders mainly lose money not due to wrong trading system they mainly lose money because they take stock market too lightly. They trades just because the market is open.
SELL Nifty. But wait for an intraday rally, wait for Nifty resistance intraday. The risk reward will be in your favour. Option traders can buy June series Nifty 9400 OR 9300 put. I will like to hear your views on the market in the comment below.
Indrajit is a professional blogger and trading system developer. Amibroker expert, WordPress expert, SEO expert and stock market analyst.Trading since 2002, he has started the journey of StockManiacs.net on 2008. He follows Indian and world stock markets closely.