09.07.2020 Thursday, 8.39 am 

Hi Readers

What has happened on yesterday? Nifty Index as expected and written opened on a positive note at 10818, which was our resistance band i.e.,10811-10845, thereafter, the Index witnessed a sell-off and moved down till our support level i.e., 10740, further the volatile move lifted the Index till our resistance level i.e, 10845, made day high at 10847.85, the last hour sell-off once again dragged down the Index, made a day low at 10676.55 and closed at 10705.75 on a negative note. 

What will happen today? Nifty Index may open on a flat to negative note to test 10690-10658 if open, trade and sustain below 10658 then, it may test 10605-10555-10520-10485-10445-10390-10335. Likewise, the immediate resistance seen at 10745-10790, if trade and sustain above 10790 then, it may re-test 10810-10845-10890-10935-10990.

Special Mention: Yesterday, the Nifty Index continued its upward journey beyond our threshold level i.e., 10770, it tested 10847.80, though it tested our resistance level i.e,10845, the profit booking cum sell-off dragged till 10676, today we must watch 10660-10630, any weakenss below then the Index may test 10550, further any close below 10770 for three consecutive trading sessions then, the Index may re-test 10330-10200 levels very soon. At the same time, the Index must trade and sustain above 10770 and moves above 10845 then, the Index may test the long term simple Daily Moving Average i.e,200 DMA lies at 10887, then to 10990 levels. But it is not so easy to trade, sustain and closes above 10890-10990, if the Nifty Index moves above 10890 and closes above three consecutive trading sessions, then the new directional up move may take the Index till 11375-11615 levels before July'20, it looks the Index may consolidate between 10990-10550 before taking any fresh move beyond 11k, let see how it trades and closes today. As expected and written, the weekly option expiry volatility ruled the Index yesterday, today also we may expect volatile move.

Trading Strategy: The Investor/trader may exercise due caution at the higher levels i.e 10890-10990, the profit booking area lies at these levels if, unable to cross and closes above these levels then, book profit in the equity segment and invest in the Nifty 50 stocks, when the Nifty Index trades near 10200-10000 levels, for a short term gain around 10-15%. This is a traders market, to trade for short term gains, rather to wait for long term basis.

The Nifty index current Price Earnings-PE is trading above 28 times, technically it is a highly over bought zone while, the Q4(Mar'20) earnings declined over 50% when compared to Q3 (Dec'19) but, the Index sidelined the fundamentals and moving northwards everyday with the help of few top weighted stocks, shows it is not aligning with the reality also, it infers to exercise due caution at the higher levels. 

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