17 November 2020 (7:54 am IST)
Indian stock markets will open today after a long Diwali weekend, and the opening is expected to be with a big gap up.
On the day of Diwali, these markets had an hour long special “muhurat trading”. That day Nifty had opened high but closed lower, near the previous closing. We may see a repeat pattern in today’s opening trading too. If Nifty opens very high, then it will come down initially to balance the RSI indicator. However, if Nifty opens with just 50 points’ gap, then we may see it rise again after an initial subdued period.
How To Trade Nifty:
- Day traders should give Nifty time to settle down after the opening volatility.
- Nifty usually takes a trend after the opening hour and it is a good trading strategy to watch Nifty in this duration.
- Slowly, a trend will emerge (use 5-minutes chart) and day traders can easily spot the opportunity to start trading.
- If Nifty declines after a high open, wait for a trading set up to appear. This could be a “Double Bottom” or “Higher Low” set up, which will indicate that buyers are again entering the trade.
- Day traders can also use a trendline to follow the price and when price touches the trendline and bounce up, that will also signal a buying opportunity.
- Going against the trend will not be a good trading strategy as Nifty is in a strong uptrend on global factors.
Indian stock markets are expected to open high and follow the global trend, which is strongly positive.