Let us analyse Nifty on 1st Dec 2016. Nifty began the day on a negative bias although it opened slight positive for the day. One of the reasons could be the lower than expected GDP data and the 10% rally of crude the previous day. As India is a net importer of crude, higher crude price may not be that good for India.
The crucial level of 8250 could not be sustained. Hence selling continued throughout the day. Generally the early hours of the trade is often indicative if the day belongs to the bulls or the bears. Today’s trade belonged to the bears as seen by the intense selling in the 1st hour of the trading session. The selling continued till the support region of 8200. All throughout the day, Nifty was supported at around 8200. The resistance was at around 8240.
Below is the 3 minutes chart for the Nifty on 1st December. Region 1 and 2 shows the resistance. At point 2, traders could have initiated a short as it was very clear that the bulls were not able to push the index further beyond 8240. This is the case of a double top formation and is often used by traders as signal to buy or sell(whether it forms at the bottom or top) during the trading session.
Also there was a short trading opportunity at around B as it formed a double bottom at around 8200. At the end of the session the selling intensified by around 20 points further. Overall, the day traded within a range.
On the daily chart, the Nifty formed a bearish candle. However, traders should wait for a breach of 8050. Till then, there is still some hopes for the bulls.
Nifty Opening:8244
Nifty Closing: 8192.9
High of the Day: 8250.80
Low of the Day:8185.05
Percent Change: – 0.38 % (- 31.6)
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