Nifty 50 trading strategy for 20th January
Nifty has closed 108 points down from the lost close. Prices opened gap down 70 points down and immediately fell more than 100 points. Prices tried to cross the day high but the level of 23266 acted as a resistance and the prices fell more than 150 points from the 23266 level. However, prices did try to recover and again tested 23266 level but failed to breakout. The prices went sideways after that. Overall the prices were very volatile for the entire day. The previous session price action collected the buy side liquidity above 13th January high and also tested the gap. There was a bearish move possible as the gap to be filled and a breakout in the first attempt was unlikely as we can see in previous instances in past. We have a demand zone just below and we have to see the big picture to anticipate intraday price action. There is a good chance that prices might bounce back from this consolidation level.
Nifty 50 trading strategy for 20th January
Long setup
Scenario 1: Price open gap down and then move down and collect liquidity below 13th January low and then bounce back immediately above the last major selling swing. After this if prices are rejected upwards by 9 EMA then we can take a target of 23266.
Scenario 2: Prices open gap and then makes the first move downwards and then gets rejected by the 23266 level and then moves higher. If we see the prices getting rejected from the 9 EMA then we can take long trade with a target of 23534.
Short setup
Scenario 1: Prices open gap down and move upwards and test the last day close and then gets rejected downwards to 13th January low. If there is a breakdown from there, we can take a short trade. targets are not clear and hence keep trailing the SL.
Scenario 2: This is a sideways market scenario. Prices open gap up and move upwards and collect liquidity above 16th January high. If we see a rejection to the downside and prices trade below the last selling swing we can take a short trade to the downside with target of 23136.
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