Nifty 50 trading strategy for 16th January
The closing candle on 15th January has confirmed that Nifty has closed 37 points up from the previous close. I would say market was largely moving sideways. Prices opened slightly gap up and fell near previous session close. From there, prices went up above the day high and previous session high as well. Prices were not able to sustain there and fell again to the day low. But since prices reached the day low at around 2:15 pm, a successful breakdown wasn't likely today. None of our trading plan setups occurred and hence we avoided trading. Prices are moving sideways and prices are still trading between 13th January high and low. The reversal zone identified in earlier articles has been able to hold the prices. We might be looking at a consolidation and a reversal in near future is totally possible. However, the prices are still not bullish as it has to cross above 23534 level before being considered bullish.
Nifty 50 trading strategy for 16th January
Short setups
Scenario 1: In this scenario, prices open gap about 23266 and goes above 13th January day high and then retraces back to the last swing low and then keep trading below 9 EMA and later gets rejected downward. The target can be 23165 and 23050.
Scenario 2: Prices open gap down and in the first move go near the previous day close and then immediately retraces back to 23050 level. After that, prices keep on testing 23050 and eventually gives a breakdown to the downside. The target is not clear and hence the stop loss needs to be trailed judiciously.
Long setups
Scenario 1: Prices open flat or slightly gap down and then first make a move downwards and collect liquidity from weekly low or previous session lows and then immediately recovers above the swing high of the day and then keeps trading above 9 EMA. If the price gives a close above 23266 level then we can expect a move till 23450 and 23500 levels.
Scenario 2: Prices open gap up and fall down and test level 23266. After testing to 23266 level, if the prices gives a U-shaped recovery and creates a new day high then we can expect a short covering move till the level of 23534.
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