We were expecting Nifty to take resistance at 7883 - 7912 in case of a gap up and Nifty took resistance at 7893.95 just below our Long trigger level of 7895 and stayed range bound for the major part of the day. We had mentioned that the last one hour should give a big move today and Nifty gave a sharp down move of nearly 80 points .
Towards the end Nifty took support at 7787.95 within our expected 2nd range of 7794 - 7779 which we were expecting to get tested today below 7823.
The world markets are in good red now at the time of writing this post , so one can expect a gap down opening and then the rest of the days action would depend on RBI's monetary policy which would be announced at 11.00 am . There is a hope of a 25 basis point rate cut in the interest rates and also a 25 basis point rate cut in the reverse repo rate , any disappointment can lead to a deeper correction if already down after opening and similarly one can expect recovery too if the market expectations are lived up to.
Whatever be the outcome one should be prepared for a highly volatile trading session tomorrow as we may see stop loss getting triggered on both sides . So one should trade cautiously and keep booking small profits as and when available
As per today’s close if Nifty spot opens gap up, then it will face resistance near 7810 – 7840 initially and breaking above that next resistance at 7870 - 7884 can get tested . Similarly if Nifty spot opens gap down then it will get support near 7781 – 7751 levels initially and breaking below that next support at 7722 - 7707 can get tested .
In case of extreme volatility we might see 7678 - 7620 being tested on the downside or 7913 - 7973 on the upside .
Levels for tomorrow are
Long above 7812 for 7862 – 7878 – 7895 , SL 7779
Short below 7779 for 7730 – 7713 – 7696 , SL 7812
Bank Nifty Spot
Long above 17198 for 17274 – 17372 – 17470 , SL 17000
Short below 17000 for 16927 – 16829 – 16731 , SL 17198
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Disclaimer : These are my personal views and trades taken on them should be done with a strict SL