Pre-Market Analysis: Nifty Future – 29th July 2020

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Observation from previous day:

On Tuesday, Nifty opened inside range and the broke PDH (previous day’s high) in midday to move up forming a NVD (Normal Variation day) on upside. There was a consolidation above the PDH (previous day’s high)after PDH(previous day’s high) broke and this can be treated as absorption of supply in the OTF (Other Time-frame) sellers zone (marked in the chart). We did warned about this up-move in our yesterday’s analysis owning to exhausted sellers (https://onerighttrade.com/index.php/2020/07/28/pre-market-analysis-nifty-future-28th-july-2020/), but still Nifty is at the OTF sellers area and we can expect sellers to still defend this zone (11230-11430) but for now nifty clearly looks in Bulls control and they will try to take prices upwards from the start.

What can be expected today:

Now we since have gone above the sideways zone, we need to see higher prices in Nifty. The bulls need to act quickly from the start. Even though we can see the up-move, please note that not every move is trade-able and we can be comfortable in longs once prices are accepted over 20430 levels (as this would mean that OTF (Other Time-frame) sellers have moved out and are not ready to defend this zone). This can also resume in a fresh uptrend in nifty. Now, till we are in bulls control, there is not point looking for any short trade in nifty. Any long trades in this zone will test out patience like yesterday.

Trade plan for today:

Nifty is expected to open near PDH (previous day’s high) and bulls should quickly act to move prices above PDH. So, we can look for open auction long trade in case of OTD (open test drive) up at PDH (previous day’s high) or open-low inside range and at break of PDH (previous day’s high). But please note that the movement today will not be smooth till prices go above 10420 levels in nifty. So, take less risk. There is no point looking for short trade in Nifty as bulls strength is clearly visible from few past days.

Some cautions:

  1. IN Nifty , we have entered OTF (Other Time-frame) Sellers zone from march which sellers do not seem to be defending looking at yesterday’s price action in the end, so a quick move breaking 10420 is also a possibility if buyers act quickly in open auction.
  2. Do not trade against larger time-frame. Though , we have a weaker bank-nifty, but there is no point of taking a short trade. Even though prices can move down, but short trades can always be risky and may not reach your intended target.
  3. Watch out for Bank-nifty, If we start to see strength in Bank-nifty, then nifty is likely to break 10420 levels.

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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