NIFTY turns bearish along with the global indices but, will it form into a trend? Chart formations show sideways range and it is likely to oscillate between 4950 and 5100 levels. European markets do not show strong weakness at present. Our market too after reaching opening lows pulled up quite a bit, there may be a reversal in the next session.
If there is a pull back, hourly charts too will go into non-trend. We are at present running short trades in both swing and trending systems, in case of a pullback both these positions will close at a loss. A close above 5050 on spot in the first hour will negate bearishness on the hourly charts. Then it will be a wait and watch situation till there is a new trend on the charts.
Markets globally are dancing to the tunes of financial turmoil; governments are scrambling for safety with new announcements every day. This has dampened investor sentiments worldwide. Volumes have been flat for most of last week showing lack of support either from bulls or bears.
Individual values of stocks do not have any impact on the present moves in the market, they are widely moving in line with their global peers. When markets are indecisive it is better to stay on the sidelines till there is some clear visibility of developments on the global arena.
Trend following systems will meet large number of whipsaw trades in these types of markets. On the other hand return to mean trading system will do well but, there is more of discretion than mechanics in the market. Traders holding short positions have a close watch on the markets and stick to stop loss levels with discipline.
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