Nifty Future LTP 8137.85
Technical Update: Nifty future closes the week at 8137.85 after making the high of 8200 for the week. The Friday session however was a positive day. On daily chart the Nifty broken down from a Rising wedge pattern and is making a pullback.
Trend: Short term trend neutral, medium term trend & primary trend are up with strong supports @ 7870
RSI: RSI is trading at 68.61 with upside momentum. There is a clear divergence on RSI which can be visible from chart above price making new high but RSI making lower high hence a cautious approach for longs should be there.
Stochastic: Stochastic indicator is been in over bought zone since April and nifty has rallied 1200 points above after that which shows market has lot of strength and why following indicators alone while going short when overbought can be devastating task. Many traders who enter shorts thinking market is high and overbought have got there account closed or in very big losses.
Volume: The last rally from 7500 to 8200 has been on significantly lower volume’s as seen from chart above.
Trading Strategy: Short term traders holding longs watch 8125 levels till nifty future remains above this level it’s a buy in dip market hence can hold their longs next resistance around 8200-8240. Only if we break 8125 or sustain and close below this level then exit long and be short with protective stops of 8200 add more shorts below 8070 for price target of 8000 & 7950.