It’s been quite a while since I posted my thoughts on the Nifty. Writing a post saying that the trend is bullish would neither be insightful nor interesting to many. I get that. And, of course a few might also wonder what the heck was this guy doing all along and a nice 130+ point move on Friday is already behind us.
These are all valid thoughts / concern but I am always driven by the quote that losing an opportunity costs me nothing. I can always wrestle my way into the market once I get more information.
I waited for clarity and always prefer odds to be in my favour. For this extra bit of information, I have to pay a price and am willing to do that.
Am I fretting and kicking myself for having missed the bus? Definitely Not. Price always fluctuates and I can find an entry to participate in the next move to 6,100 (you read it right, SIX THOUSAND ONE HUNDRED).
Let’s look at the daily chart of the Nifty and do a simple trend analysis. The breakout past the prior high at 5,450 is an important piece of information for me. Why? It’s got nothing to do with fibonacci retracements or any other esoteric stuff. I like simple approach.
By moving above 5,450, Nifty has confirmed a bullish sequence of higher tops and higher bottoms. This gives me the confidence that the uptrend is still in force and am now willing to get aggressive in terms of looking for long opportunities.
Why 6,100 as target may be the next question? Nothing magical here. I drew a simple set of channel lines, a preferred tool of choice, and the projection gives me a target of roughly around 6,100.
I would consider a re-look at my bullish stance only if the price falls below the recent swing low at 5,215. If this happens, it would disturb the sequence of higher tops and bottoms and by extension would mean that we could head lower.
Those entertaining the thought that the Nifty is headed to the moon, jump ahead first thing in the morning on Monday but place your stop loss below 5215, for a target of 6,100. Well, there are issues such as risk-reward, maximum permissible risk in a trade etc etc…that needs to be considered. These pertinent factors would dissuade me from chasing price.
I am sure there would be a pull back pretty soon which would let me get long. The middle green trendline in the chart is my preferred choice for an entry.
What if the pull back never happens and price rockets straight to my target ? Well. I will end up missing the move. Doesn’t matter, there are lots of other opportunities in other stocks where I can still make money. And, I will await the pull back whenever that happens.
After all, it’s my money and am accountable only to myself. If I miss a trade, No big deal. If I buy in haste and lose money, it dents my confidence and also erodes my capital. I prefer missing a trade rather than losing confidence and money.
Trade Safe and Don’t Get Hurt