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)

When Does Nifty Break out of the Longer Consolidation?

52 sec read

The current sideways markets running in Nifty Futures is almost 48 days old. And consolidated between 10800 – 11145 levels most of the time.

Markets trading in such a tight range with higher intraday volatility is something new to us which could bring a lot of frustration to the people who are not able to adjust to the newer situation especially the traders who are anticipating a stronger breakout.

Now the real question is how one can understand with simple technical indicators when this 8 weeks of tight consolidation is likely to come to an end?

The answer is there with the Nifty Hourly ADX charts. Interesting thing is Hourly ADX resumed above 20 after a long time which sparks a possible trending action in a near term.

Currently -DI is greater than +DI. However, the slope of +DI and – DI is falling with falling ADX slope explains the current sluggish action in the markets. This cannot be kept on happening for a very longer period.

Somewhere the ADX slope has to start turning towards the positive slope indicating trending action most likely on the downside in the very near term as long as -DI is greater than +DI.

My speculation is whether post the FED policy announcement will the downtrend resumes in the market? If yes I would be watching a price breakdown from 10800 levels in the form of strong price rejection or a possible gap down scenario for lower base targets sub below 10600 levels positionally.

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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