NIFTY weekly view August 24 - 28

2020년 8월 23일

In my last week’s post (link below) I wrote

“There are two possibilities for the coming week.
Possibility 1: Consolidation in zone 11312 - 11050. This basically means, the move on Friday could not get great follow up selling.
Possibility 2: New downswing starts which takes NIFTY below 11000, around 10830 as the first target. This move has to be fast and completed this week to show strength in selling and confirmation of the intermediate top.”

I confirmed possibility 1 in my Monday August 17 post

Overall, it was ok anticipation. NIFTY actually broke out and made a new high of 11460, but could not follow through above 11400.
============================================================================================================================================================================

My observations for the week

NIFTY gained 1.73% during the week.
BANK NIFTY 2.86% higher.
VIX down 8%
Reliance Industries down 1.51%.

My view for the coming week

It is a confusing market, no doubt about it. For trading, I am going to keep the following things in mind

Current trend is consolidation after 150 days 50% rally from bottom. There may be signs of exhaustion and pause which may continue for a while. And no point in chasing the breakouts.
This market has changed regime already - VIX dropping and range contracting. It is in the phase before it settles in some sort of trend. Imagine it is like a twilight zone.
For next week, important to watch BANK NIFTY and Reliance Industries, both have to perform at higher levels, then only NIFTY can shoot to 11600.

My Plan

Assume ranging market with boundaries 11100 - 11480.
Take trades in opposite direction with tight stops of 50 points in NIFTY
If NIFTY breaks the range, wait for the first dip and trade in direction of the breakout.
I won't take any positional trades in either directions if NIFTY is in the zone 11380-11630. I have explained why in my earlier posts.
I’ll use point 1 to 3 for intra day trades

Potential trade idea

Buy 1X 10400 CALL
SELL 1X 10500 CALL
SELL 2X 10600 CALL
SL : NIFTY closing below 11144. , NIFTY closing above 11650

******************************************************************************************************************************************************************************************************

Weekly View (August 17 - 21, 2020)

Daily View (August 17, 2020)