Pre-Market Analysis: Nifty Future – 22nd July 2020

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Observation from previous day:

As expected from previous analysis (https://onerighttrade.com/index.php/2020/07/21/pre-market-analysis-nifty-future-21st-july-2020/), Nifty was bullish all day on Tuesday. It opened with a big gap up and continued it move up after absorbing all the supply, though on Intraday basis the move was not big. Nifty ended up above IB range forming a typical NVD (Normal variation day) on upside. The value areas is moving up everyday indicating a good uptrend but prices are approaching sellers zone (10230+ levels) from where the big downmove started in march. So, we need to be cautious now.

What can be expected today:

I am still bullish on Nifty although the trade facilitation is not very good on upside. We can expect nifty to move above PDH to test 10230 levels where the expectation is that bears will defend that levels and things can get volatile. So, trade with caution. There is no reason for us to have a short view on nifty unless market indicates that.

Trade plan for today:

I will be looking for a long trade in nifty will prices are accepted above PDL. The good entry point for long trades can be rejection at PDL (test of Gap) or break of PDH. If prices are accepted below PDL, then we can look for a short trade which can fill the buyers gap but that trade would be risky as it is against the trend. If prices trade above 10230 levels, be very careful with any long trades.

Some cautions:

  1. Nifty is entering the zone from where the big selling started, so bears are expected to defend that zone.
  2. Banknifty is also near swing high level, so watch out if it breaks out or has a failed auction which can help you take a stand in nifty.
  3. Unless market shows signs, there is no reaosn to be bearish. nifty might struggle to move up above 10230 levels and that is expected.
  4. Trade with reduced position sizes.

Disclaimer:

Please note that this is a personal view for learning , observational and education purpose and is not a trading recommendation. Trading futures carry a risk, so you should consult a financial expert before taking any risk. Also, Nifty in above statements Indicate Nifty future for current month and not Nifty index.

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