Is the Definition of Swing Trading Undergoing a Change?

  • Stock Market Analysis
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My views have undergone a major change!

Video on our trading & investing strategy and thoughts: https://youtu.be/RGN19EPqa-g

Important:

The opening price of 13-6, which was the first session of the week that has just gone by, was 15877 and the high point for the week was also recorded on the same day at 15886. It clearly means that the high was made in the opening candle itself and Nifty has then never been able to come within a range of 5-10 points closer to the high point.

Nifty has made 2 failed attempts to retest the high, but it could not do so as the selling pressure prevailing below 15886 or 16000 seems to be too intense for the bulls to manage.

From the Monday 13-6 open price of 15877 to the Friday 17-6 open price of 15272, Nifty has been severely dented - by 3.81% or 606 points! This speaks volumes about the bearishness that is prevailing in the market. Not only this, but the intraday volatility is also intense as Nifty has made several moves where it has moved 50-100 points in a matter of a few minutes and sometimes even in 5 minutes.

Are There Any Swing Trades In Sight?

It was for the first time in several months that last week, I did not specify any stocks or sectors that were good to consider even for a short-term swing trade. With the intense volatility and the wild and fast swings happening within Nifty and Bank Nifty , I am not comfortable taking any overnight positions.

As a result, I am tempted to redefine [at least for my own trading], the definition of Swing Trading from 1-5 days to the Swing Low of the opening drive [or price move] to the Swing High of the opening drive, and then many such variations during the day. Nifty / Bank Nifty has not been respecting any technical levels as they simply drop like a waterfall but they have been respecting the resistances quite well.

So there are many opportunities during the day to trade in line with the risk appetite and that is why I think the definition of Swing trading has, for now, undergone a change. At least this would save the traders from getting trapped by the next day's gap-up or gap-down.

From a medium to the long-term investment point of view, I am not sure if this is the bottom as the indices keep falling eventually so unless one has a very large sum of disposable funds with a huge appetite to digest any decline in the value of the holdings, it is best to stay away for now. The India Vix should come down to below 20 and ideally below 19 to initiate longs as till then, the see-saw, spike and slide, and other versions of the ups & downs would keep recurring.

Please protect your capital to stay in the game!

Note: I am not SEBI registered, and this note is shared purely for informational and educational purposes only based on my observations & experiences.

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