Indian Stock Markets Today: Nifty Signals Minor Downtrend

8 January 2021 (8:45 am IST)

SGX Nifty is 90 points up at the time of writing, which signals another gap up opening in Indian stock markets and Nifty. In the last two sessions, Nifty has opened high and closed negative. This pattern could be repeated today.

Yesterday, before the opening bell, we had reminded our readers about Nifty’s signals on hourly charts and how it had closed just below the 20-Day Moving Average on this timeframe. Usually, this is considered a negative signal.

By the close of yesterday’s trading session, Nifty had created two negative signals on hourly charts: (1) It closed much lower than the 20-Day Moving Average. (2) An MA crossover was formed where smaller MA (9-Day MA) went below the bigger (20-Day MA) Moving Average. This is another bearish technical signal. These signals hint at a minor downtrend or correction in Nifty.

How To Trade Nifty:

  1. SGX Nifty is signaling a gap up opening in Nifty.
  2. Going by yesterday’s technical signals on Nifty charts, today, it will be a better strategy to sell on high or near resistance levels.
  3. Trading based on hourly chart signals is one of the best trading technique.
  4. Take long positions when an MA crossover happens after a downtrend, near bottom support levels.
  5. Trade short when an MA crossover happens near range top or resistance levels.
  6. Today, the short trade strategy could be better if Nifty falls from the range top after turning down from 9 or 20 Day MA.
  7. Nifty has been very volatile recently so keep stop loss in all open trades no matter how confident you are about catching the right trend.

Indian stock markets are expected to open with a gap up, like the previous two session. And, like those session, these markets are expected to trade rangebound after a high opening.

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