Inside day on NIFTY
A day of inside range for NIFTY with its close, edging up marginally. Range market continues to get tight. 5050 levels seem to be giving a strong resistance on NIFTY, range markets oscillate between high and low of the range. The present range being 5100-4950, NIFTY is trading at the bottom of the range with MACD having a bullish crossover before any clear divergence. Histogram forming a peak above zero is contradicting one another, indecision continues.
NIFTY needs to re-test 4800 level lows again to gain any bullish strength, if it turns up without strength it would only result in a false up move adding strength to the next bear phase of the market.
With daily charts going tight, hourly has started giving streaks of whipsaw trades. It was a dramatic day throughout the session today. As the trend opened out, a short call failed to get triggered & with NIFTY closing above EMA, Long signals came through. Even the long call was not triggered; instead it took to strong bearishness. Finally shorts got triggered, but were not having good strength further, it kept oscillating at the lows and closed giving an uptick on the hourly charts.
Strength of the Index rating towards its trendiness in the market is very weak.
An uptick when there is a short running position means a short cover signal, it has come on the closing bar. With gaps ruling the roof in present turbulent times, it is going to be a wild guess where the markets will open in the next session.
At the time of this writing Europe is trading positive, what will be the closing of the US markets is too early to judge now. Gold prices taking a dip after giving anal time high yesterday and stock markets looking positive at the moment is a bullish sign. We will exit swing short positions at the opening price in the next session, while trend positions will hold to stop losses until further signals come out.
On the other hand if weakness continues and we open gap down, 5010 on spot is not taken off, please hold to shorts in swing for further exit signals
It is a testing time of patience for trend traders, like in a single trade where we give back earned profits to stay with the trend; a system too operates in the same way. It was a joy ride for the past 16 months for the trend followers, so we need to give back some of our gains in following the system. This may tempt the new entrants to search for a new system or move to return to mean trading systems, caution is advised here, as return to mean systems just keep spitting out loser after loser in a trending market.
Trust your system; be with it on its ups and downs, long runs will prove the efficiency of it.