19 January 2021 (8:24 am IST)
After yesterday’s fall, SGX Nifty is trading 135 points higher, indicating that Nifty will also open high, perhaps near the previous opening from where the index had fallen.
Technically, a higher opening was expected after yesterday’s negative trend took Nifty to oversold zone on hourly charts. On daily charts, the index had fallen below its 9-Day Moving Average, which was a negative signal.
How To Trade Nifty:
- Since the last two sessions, Nifty had been in a downtrend.
- Will this trend continue or not, this can be revealed by the 20-Day MA on hourly charts and 9-Day MA on daily charts.
- If Nifty crosses above these indicators after a gap up opening, then the previous downtrend will end and Nifty will be back on track for a range bound session.
- However, if these two indicators stop Nifty and the indicator reverses down from here, then the downtrend will continue and “sell on high” strategy will suit day trading.
- Day traders must wait and watch what kind of trend Nifty shows.
- Follow that trend, keep strict stop loss in open trades and exit trades once the trendline is broken.
Indian stock markets are expected to open with a gap up and big gains. After that, these markets will stay rangebound within the last two sessions’ trading range.