Nifty takes a vacation.

This week Nifty reaches to its holiday mood, long trade on the daily charts have got closed with a 170 points gain after holding for above 40 days in trend. With markets trending bullish at the moment, price moves are subject high volatility. The little or no gains that the traders made in the past month is at stake in future trades before markets reach for non-trendiness. The results that have been announced so far do not give any surprise in them.

The number of stocks that are holding to bullish trend are very low in number. Those stocks that showed strength in them have got exited at the height of their bullish strength, by turning down with a bang. The left over stocks are lurching close to their stop losses. This would mean that, the small gains made by winners will be eaten by the losers in the days to come, before the broad market settles into a good sideways range.

The trend of institutional investments shows no change in direction with FII’s being net buyers to the tune of 1312.41 Crores and our domestic counterparts taking out 765.79 Crores in their investments from the markets last week. Domestic players have become shrewd, gone into cautious mode, well in advance. Have the smart guys mis-judged the markets? As of now, it makes sense to come to a conclusion that we have become smart.

Currency markets have been silent with a small bullish pattern emerging in the daily chart, giving a long trade signal on the value based trading system. Buy USDINR at 55.4080 with a stop of 54.7645 for a target of 57.1225. A reward of 1.7145 for a risk of 0.6435, which is close 3 times the risk on trade. Traders be cautious and operate strict stop losses, as the broad markets are not in good mood.