19 October 2020 (8:10 am IST)
For Indian stock markets, their weekly charts will provide important clues for trading this week.
SGX Nifty is 60 points higher at the time of writing, which is a very positive signal on daily charts. But, weekly charts show an opening within the big shadow of last week, when this index had crashed with Nifty and broader Indian stock markets.
This is why day traders must watch how Nifty trades after a gap up opening, and only then decide on their day trading strategy.
How To Trade Nifty:
- As we know, Nifty is facing strong resistance near 12,000 mark.
- A gap up opening will take Nifty closer to a minor resistance of 11,834.
- If Nifty crosses above this minor resistance, then it will face the major resistance of 12k.
- The minor trend is positive so day traders should wait for Nifty to cool down a bit.
- For taking long positions, it will be a good time when price rises after taking a dip.
- Gap up opening could create a smaller range for Nifty. Trade between the opening level and higher resistance marks.
Indian stock markets are expected to open with a gap up and turn range bound after that. The trading range will stay within the last week’s high and low levels.