Nifty still in long term downtrend as long as it is below 200 SMA on daily charts. What it is attempting is can be best said to be a pullback rally towards 200 SMA of 10765 levels...why..?? Many stocks from Nifty-50 camp are still not showing that good signs of bottoming.
Nifty hourly is in uptrend and as long as holding 10285 levels it is safe for bulls...But the errant nature of markets dealing in gap-up and gap downs it is not safe to carry intraday positions. Trade with levels only...
As long as market is staying below 200 sma it would be skeptical to be a perma bull.
Many are confused to take positions in stocks or not..??
There are approaches to be followed in market in different conditions. The strategy and risk management you had followed when nifty in uptrend didnt work in bear markets when nifty is below 200 sma... As rallies are quick ones and you need to be book profits immediately...Catching falling knives at monthly/weekly support zones is good strategy for some but you cant invest your full capital allocation on the same strategy...
I belong to camp which wait for proper base formation to be take place in stocks before venturing in. I know it requires days or rather weeks of patience to observe market sitting idle. But thats what i learned and better suited for me, and it helped me in 2008 fall also...It may require missing 15-20% of moves from bottom lows but it assures me what should be my stoploss in such scenarios...
I am not against catching falling knives totally. But you should not bet your whole allocation towards that strategy. No one knows whether market made bottom or not...I too trade 1-2 positions but followed it strictly...with tight SL and quick profit booking at targets spotted by moving averages or price action...
As usual very useful guidance.
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