Two days narrow range movements in nifty brought decline in volatility
NIFTY: Two days of narrow range movements in the Nifty have brought about a decline in volatility. Momentum on the down side has also fallen. A decline in bearish momentum means that prices are falling but at a slower pace. After a period of expansion, markets tend to consolidate. This seems to be happening again. The Nifty has a probable trading range between 8030 and 8130. As the trading range develops, it is possible that these boundaries may get adjusted a little. A fall in volatility brings about trading opportunities. A move below 8030 should be a short sell, while a rally above 8130 should be a buying opportunity. We are now willing to go short below 8030, since it is possible that the current phase of consolidation is a pause in a down move. Earlier, the increased volatility did not provide us with a trade. Now, we have levels to act upon. Stops for the trade should be 8080 for both long and short trades. Either the breakout works or we get stopped out.
BANK NIFTY: Bank Nifty had again witnessed a downward day as prices opened near the yesterday’s close and made a high above 19200 initially. However, prices found resistance there and then index slipped down throughout the day that forced it to close below 19000 which acted as a support. A follow through on Monday may confirm this breakdown on the downside. Bank Nifty now has seen four down days out of last five trading days that shows the strength of bears in current scenario. Furthermore, last two days were comparatively less volatile so it is a great possibility that we may see some consolidation in the index soon. Hence, we are advising traders to avoid the market till the next trading pattern tomorrow on dips and consolidation breakout with lower volumes..
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