After being 4 times lucky at 5700, Nifty finally breaks it and close below it. However, the manner in which this level broke, was absolutely astonishing. Nifty first rallied more than 100+ points, at one point threatening a breakout on the upside, before making a dramatic U turn and falling more than 200 points from the highs. At such times, only a proper stoploss can save a trader from being wiped out. Hope our followers were safe . After taking longs at 5735 Spot, we had clearly advised a stoploss of 5790 Spot once Nifty reached levels of 5820+. Once it started taking resistance at the 5825-5830 zone, a fall was expected, but, to be honest, such magnitude was simply unprecedented!
Now that the level of 5700 has been broken, it is better to stay with the trend and avoid Long trades till Nifty gives us a close above this level again. If it does manage to close above 5700, we can again enter a rangebound trading environment. Bulls have hope only on a close above 5830 Spot as of today. Till it stays below 5700-5760 levels, this breakdown will be considered to be Valid and Short trades will better in terms of Risk: Reward.
For tomorrow, intraday traders watch the levels of 5630 and 5615 on the Nifty spot in morning trades. If Nifty opens or goes and stays below these levels, one can consider entering shorts for 5570-5550 kind of levels. On the upside, Nifty faces immediate resistance at 5675 and 5700 levels. If conquers them in morning trades, then it will try to move higher towards 5740 levels. As stated earlier, try to enter short trades at Resistance levels or on the break of supports till Nifty gives us a close above 5700 Spot.
17 Jan: Nifty spot resistance at 5675-5705-5745-5805. Support at 5630-5615-5575-5550 - www.niftypower.com
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