Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

Nifty Futures Mid July 2019 Short Term Overview

1 min read

Nifty Futures closed the long pending Island gap reversal this week. Nifty also managed to recover marginally from the lows made but not completely out of the woods yet and continuously facing selling pressure near 11600 levels.

Nifty Futures Rejection near 11600 levels

Last Friday’s closing ended on a negative note with a sharp fall witnessed in the last hour of trading. Which could possibly spill into Monday’s trading session as well.

However, failure to continue in the direction of Friday’s bearish tone is a sign of strength where one should monitor for price acceptance above 11585 levels which could bring more bullish strength towards 10736 and 12000 levels near to end of this series.

Nifty Futures – Point of Control

Nifty Futures – Yearly Distribution POC Migration – Visualization

The above chart shows the Point of Control migration from 10886 to 11736 levels during mid of June 2019 which is a good indication for any upside continuation in the medium term.

Index Volatility

Intraday volatility is descent where the index itself registered a minimum trading range of 100+. However, India Vix is declining on the other side which makes the OTM options (both Calls/Puts) cheaper.

India VIX – Daily Charts

What is most surprising to the majority of the traders is how the India VIX can fall tandemly along with the markets. If you are thinking so then understand the fact that India VIX is calculated based on OTM options. There are scenarios India VIX can rise even in the rising markets and can fall along with falling markets. which is a weird thing and unconventional according to many traders.

To keep things simple let’s not use India VIX for predicting the market direction especially if you are an intraday trader or a short term trader because it rarely makes sense to correlate Nifty with India VIX from a very short term perspective.

Trading Sentiment

Short term sentiment is positive and the medium-term sentiment is negative. Whenever such a mixed situation happens it is always good to focus on short term sentiment. So in order to continue longs one need acceptance above 11585 and sustained price action above 11600 to target higher levels. Or if the short term sentiment turned to negative in the upcoming sessions then one can consider resuming bearish view in the direction of medium-term sentiment to target downside reference levels 11420-11440 levels.

Last but not least it is always good to maintain a neutral opinion during weekends especially when there is a mixed direction from two different timeframes (Short term, medium term).

Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

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