Nifty Futures started its liquidation phase since the start of Karnataka election results. Clients are liquidating their major long positions and parallelly PRO+DII+CLI also exiting their shorts positions. Most of those long liquidations so far resulted in a net negative trend.
Nifty Futures on Wednesday trading session exactly respected at the Tuesdays prominent POC and also selling continued at days open. Day ended with a spike with a poor structure combination indicating a potential pullback towards 10540 levels as the short term trading inventory goes short to too short. Current swing low is not secured yet (will be revisited in a very shorter term).
In the financial markets, often a set of market participants keep on adding long inventory of a particular trading instrument during bull markets (long inventory pile up phase) over a period of time. At times the long inventory goes to the extreme which is often followed by the liquidation of those piled up inventories (liquidation phase). It is a trading good practice to understand which participants are piling inventories and who in the markets are cutting down their inventories.
Nifty Futures formed a back to back secured high indicating a potential swing top formation and also on Friday’s trading session broken 2 week low comfortably and closed below that comfortably. Immediate shorter term resistance coming around 10720 levels. In the last article, we talked about Too Many Weaker References dominating Nifty Futures.
“Too many Weaker References” – What does that actually mean? It means more of short term buyers behavior at every dip where they come and pile at very mechanical references. Those are the references which are often susceptible to retest and at times faster. when the weaker reference levels are exponential it indicates that short term inventory is getting long to too long and the revisiting odds of all those references significantly increased.
Nifty Futures formed value area lower on Wednesdays trading session however holding on to the major support level 10698 on closing basis. Both Indicator sentiment and Profile sentiment are holding to negative. More under-performance seen in Midcap and Smallcap stocks. Now staying below 10698 is critical for Nifty Futures towards the downside references 10480. Value buildinng lower is the further key to downtrend in a very short term.
Nifty Futures on Wednesdays session made a high of 2 point away from April month high. Trading session is dominated by intraday buyers followed by a potential daytimeframe stop hunting. Overall sellers controlled the session during the start of the session and second is dominated by long liquidation by intraday timeframes.
Nifty Futures on 30th Apr 2018 ended with a strong closing at the day high. Current swing rallied from 9960 – 10788 i.e almost 818 points in the favor of bulls without any major price retracement. Current trading sentiment is positive across all the timeframe. However the current swing momentum is slow and steady sort of a rolling momentum which pulls lots of inventory pile up from short term trading community and the inventory is dangerously long.
It is a momentum buyers market when comes to Nifty Futures trading. Shorter term momentum traders are driving this market in April Expiry series. Every micro dips are bought for this series a typical behavior of momentum players. And the last couple of days shorter term inventory is getting long to to long. No so good indication for the current uptrend.
Nifty Futures is consecutively making higher high and higher lows for last 4 trading sessions. This series so far shorter term buyers dominant is more than anyother timeframe. One of the day where shorter timeframe inventory went long to too long. Profile structure is showing a possible instant weakeness however support are building around 10280-10300 levels.
Slaughter the Bulls and Bears with the guillotine called Volatility. Yes, market volatility is the name of the game which is being played, and this sort of jitter could confuse the market participants to get out of their positions, to take wrong opinion about markets and the rest to stay away from participation.
Nifty Futures on Monday session opened with higher confidence however got back into the previous days range and started balancing in the first half before picking up the high confidence from the buyers in the second half followed by a late spike in the last 45 minute. Spike rules apply for Tuesdays trading.