Nifty 50 Trading Strategy for 21st January
Nifty has gained 140+ points on 20th January. The reversal zone identified has been able to support the prices and prices have shown resistance to fall. As mentioned in earlier posts, prices are in a consolidation zone as the prices have stayed at these levels for the last 6 sessions. There is good chance of prices starting recovery from here on.
Below we can see the trading plan for 20th January and the 15 minute chart of Nifty 50. We can clearly see that prices tried to follow the bullish setup with gap up opening. 13th January high was anticipated as resistance as this was coinciding with January 16th high. Prices did reach the 13th January high but there was not enough buying pressure to break the level. Market went sideways after the breakout attempt failed.
Trading Strategy for Nifty 50 on 21st January.
Long trading strategy
Scenario 1: The level of 23266 is very important as it has acted as support and resistance on multiple instances. Today also, the prices came below 23266 level and then after recovering above it gave a good move up. There will be liquidity below this level. So, for the first setup, the prices open gap down and then makes the first move to the downside below 23266 level. After collecting the liquidity below 23266 level, prices should recover above the last selling swing and then should trade above 9 EMA. If the price is rejected upwards, we can expect a move first till last session high. If there is a good liquidity sweeping pattern near the previous session high it may go till 23528.
Scenario 2: This is the most bullish setup, where prices open gap up and then falls near the last session close and gets rejected above the day high and above previous session high. Prices can go till 23528 level if this setup happens.
Short trading strategy
Scenario 1: Although the market has shown strength in the last two session, it is still not a clear bullish scene. The market might remain sideways for some more time. If the market remains sideways, there can be short trading setups possible. In the first case, the price opens either flat or slightly up and makes the first move upwards and go beyond the last session high. After collecting the liquidity above the previous session high, prices might get rejected downwards below the last buying swing. If it gets further rejected downwards from the 9 EMA, the target can be 23266.
Scenario 2: Price open gap down and then moves up near the previous session close and then immediately falls to the level of 23266. If price shows a liquidity sweeping pattern near that level and gives a close below 23266 then we can take a short trade with a target of 23100.
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