13 November 2020 (8:15 am IST)
SGX Nifty is 100 points down, but its trend is range bound and this futures index of Nifty is trying to rise from today’s low points.
In Indian stock markets too, we can expect a similar trend where stocks will try to rise after a low opening. Indian stock markets will have a special on hour’s “Muhurat trading” on Saturday evening for Diwali and then stay closed on Monday.
That can increase volatility in these markets. Global cues are negative but the 13,000 mark is so close for Nifty that markets sharks would like to take Nifty to that mark. These opposite factors may keep Nifty and broader stock markets within the previous two sessions’ trading range.
How To Trade Nifty:
- Day traders should watch the first hour’s trading in Nifty.
- If it shows any trend, then trade with the trendline.
- If Nifty turns range bound like yesterday, then stop trading and leave markets to trade on a better day.
- A lower opening will take Nifty to oversold regions on smaller time frames (5-minutes).
- Markets may recover to balance the RSI on these smaller timeframes.
- Day traders should consult both smaller and bigger time frames (one hour) to decide how the trend is developing.
- Once a clear trend is visible, the can trade with the trendline for profitable trading.
Indian stock markets are expected to open down but trade range bound in this session. If any index or stocks falls below the previous low mark, then we can expect more decline in those entities.