Tuesday, May 10, 2011

How To Intraday Trading

As mentioned yesterday, Intraday Nifty managed to survive the important support of 5425 & bounced back from deeply oversold zones (Nifty had closed in red for 9 consecutive days). Now Nifty spot has resistance at 5550 & if this resistance is taken out with volumes Nifty option may be heading for 5635-5650 in next couple of sessions. On the other hand, decisive close below 5425 will confirm the bearish trend as far as medium term charts are concerned.  

Nifty opened on a  positive note with an upward gap of 30-35 points as most of the global markets were in green & Nifty Stock touched an intra day high of 5586 before declining sharply in the morning session to touch an intra day low of 5502 before recovering again towards positive territory to close at 5551 just 1 point below the previous close.

As far as, extreme short term charts are concerned, Nifty has made an "Ascending Triangle" kind of pattern in the trading of last 3 days making higher bottoms at 5445, 5473, 5495 & resistance at 5585 & 5570. Since the pattern is bullish there are more chances that it may give bullish breakout from the top resistance level at 5575-5580 giving an opportunity for an upward move of 100-125 points which are likely to be achieved in next few days.

As far as bar reversal in Daily charts are concerned, stocks like L&T, Suzlon Energy, Sesa Goa, Century Text., Indraprastha Gas, Escorts, Biocon, Guj Mineral, Fortis Health, Parsvnath have given "Upward Bar Reversal" while Nifty, SBI, ICICI Bank, Axis Bank, HDFC Ltd., M&M, DLF Ltd., Titan Ind., BHEL, Sintex etc. have given "Downward Bar Reversal". 

Stocks like Nitin Fire, Genesys Int., Eicher Motors, Amrutanjan Heayj, Berger Paints, Liberty Shoes, Smartlink Network, Bata (I), ICSZ (I), Everest Kanto Cylinder have shown  spurt during the day with unusually high volumes.

Sector wise, most of the stocks like Jubiliant Food, PVP, Liberty Shoes, Coal India, Atul Inds., Bata India, Prakash Steel, NEC Life, Anantraj Inds., Hind. Unilever, Bharti Airtel etc. were among the top gainers of the day,  to close in positive territory whereas stocks like SKS Micro, ADSL, Piramal Health, Everonn, S Kumars', GE Shipping, Acropetal, Mastek, Amtek India etc. attracted profit booking at higher levels & closed in red territory. As far as, A/D data is concerned it was in favor of bulls in the ratio of 3:4 with 601 advances & 828 declines during the day.

In nutshell, after declining sharply from 5945 to 5445 (nearly 500 points), Nifty has entered deeply oversold zones with crucial support at 5425 & resistance at 5575. Decisive break above 5575 can target 5675-5700 in coming days. On the other hand, if Nifty is unable to hold the support of 5425 it will open the new bearish targets of 4900-5000 of Intraday Nifty which can be achieved in coming weeks.  The best strategy is to continue to buy oversold stocks which can give reasonable good returns in next few days.

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