Nifty Jumps 181 Pts; Has Trend Changed to Positive?

  • Stock Market Analysis
  • Editors Pick

The start of the September 2023 monthly expiry was full of fireworks. On the first session of the expiry, the benchmark Nifty 50 index jumped 181 points or 0.94% to 19,435.3 and all sectoral indices closed in the green zone, except the pharma space.

For the last many sessions, the trend of the index remained more or less sideways with a tilt towards the south. In my opinion, traders should not jump the gun and initiate aggressive longs on the index at the moment. The broader trend is still downward but the index is taking strong support from the lower levels which is keeping it from falling at a rapid pace.

Hence, from the short-term trading perspective, traders will likely make profits if they keep the directional bias sideways. That simply means going long near the support and short near the resistance. This strategy has been working brilliantly for the last many sessions and as of now, this tussle between bulls and bears continues.

As mentioned in my recent analysis of Nifty 50, aggressive short positions should be given a second thought as long as the index is not breaking 19,200. On the upside, the level of 19,584 (can be rounded off to 19,600) still remains the resistance that needs to be crossed before calling a trend reversal.

Hence the defined range that traders can play is 19,200 - 19,600. Direction-neutral options selling strategies are minting money in this kind of movement despite a very low India VIX of 11.37.

Those who are more inclined towards making long positions can use another trick to better gauge the trend reversal - Trendline. Starting from the all-time high, a trendline can be drawn which was violated on 24 August 2023 on account of a failed breakout. This trendline can be revised by joining the same day’s peak. At the moment, the breakout point of this trendline is at 19,480.

In case you want to connect with me, reach out on Twitter. My handle is - aayushxkhanna

Read More: Nifty 50 in Range; Options Selling Still Going Strong!

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  • Gautam Bedi @Gautam Bedi
    As per mu analysis im seeing nifty to test 19240 levels for a final bounce and then rally for 20120 till G20 sunnit and after that a nose dive crash till 1850
    Like 2
  • namami ghosh @namami ghosh
    brilliant analysis and strategy 😊
    Like 3
  • Niraj Chheda @Niraj Chheda
    As per my analysis, I am feeling fresh All Time High will be seen before end of Oct Expiry. I will wait and see how market unfolds in this month.
    Like 1
  • radha krishnan @radha krishnan
    Good analysis , looking forward for more … thanks
    Like 0
  • Vijaybhai Pandya @Vijaybhai Pandya
    yes it is definitely changed positive but today's high should be maintained to decide buy or sale
    Like 2

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