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Symbol     LTP Chng%
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Nitfy Monthly Trend

9/3/2016 5:26:36 PM

Nitfy Monthly Trend

Nifty...Bullish since last six consecutive months from March 2016. This is the seventh consecutive month when Nifty has shown tendancy to hit one more monthly high. It seems that the Index is going to achieve one more high after the reversal in March 2016. The chances of generating one more green candle on the charts has increased, though it is too early to say.

The point of discussion here is, where the Nifty will go from here? In upward direction or downward direction or one more consolidation? The question is too confusing. But, I think, the situation is not. Let us see how. 

The index closed at 8786.2 on the last day of the previous month. The next day, it opened at 8793.6, which is higher then previous month's close. One positive factor. It hits the low of 8759.95 on first day of the month. On Friday, again the index opened above previous day's close. and closed too above the previous day close at 8809.65. Though the range was very narrow, the index tends to go in upward direction and tends to break the open of the month - 8793.6

The question may arise that what is so significant breaking the open when just 2 days has been passed? Very True, only 2 days has been passed and there is a long way to go. But the indications of the index movement direction is on upward side and if I have to take any decision regarding index trading then I must tend to go long with this situation. There are no indications of going short other than speculations. The traders does not have proper knowledge about charting or techincal analysis may sometimes assumes that the index has grown too much and now it must come down and so on. Here, I suggest not to be carried away by any such assumptions or thoughts and use technical analysis or any other method for taking trading decisions.

Breaking the open after hitting the low on monthly candle in just 2 days of month starting, it clearly indicates that the index is not going to go on downward side, unless it breaks the open again on downward side. So one thing is clear that there is very less joy for bears. 

Traders can go long with open as the stop loss for short term. Here monthly open is 8793.6 and the close of 2nd September is 8809.65. The psychological advantage is of breaking the barrier of 8800 for Nifty in cash. So breaking both, the monthly open and 8800 level on the same day gives moral boosting to the bulls. Market is entering in new orbit of above 8800. Take long positions on Tuesday, 6th September, 2016 and keep the intial stop loss of 8793.6 in mind. Once it goes upward, traders can trail the index for more profits. Here the index seems to hit 9000 levels in very short time. There is a resistance at 9050-9100 levels where the index may take a pause or some sort of retracement may occur. Trade cautiously after the index cross 8950 levels in cash. 

Happy Trading...trend is friens.

Tushar Dave 




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