MARKETS FOR 7TH AUGUST

AS EXPECTED NIFTY OPENED GAP UP  AND AFTER THE GAP UP IT  MADE A DAY HIGH OF 5293, REMAINED IN A TIGHT RANGE TO FINALLY CLOSE AROUND 5282. ALTHOUGH SPOT NIFTY BY REACHING TILL 5293 COULD CLOSE THE BIG GAP OF 10TH JULY TILL  5282, YET IT COULD NOT DO ANY HARM TO THE  11TH JULY LOW of 5300, HIGH IS AT 5336 AND CLOSE IS AT 5306 SOPT. TRADERS & INVESTORS MUST KEEP IN MIND THAT AS LONG AS THIS NAUGHTY CLOSE OF 11TH JULY REMAINS UN HARMED, NIFTY WILL
CONTINUE TO BE UNDER BEAR PRESSURE AND EVERY RISE TOWARDS THE BOTTOM WILL MEET WITH SELLING PRESSURE. SO, ON TUESDAY 7TH AUGUST IF ONE FINDS THE LOW UN TOUCHED THEN ONE CAN EXPECT A FALL FOR NEXT FEW DAYS BEFORE ANOTHER ATTEMPT BEING MADE TO HARM.

FOR TUESDAYS TRADING ONE MAY EXPECT A FLAT DAY WITH A MILD OR EVEN NEGATIVE BIAS. THE BIG GAP UP ON MONDAY HAS TO DELIVER ITS QUOTA OF FLATNESS AS LONG AS SPOT NIFTY CONTINUES TO REMAIN ABOVE THE MONDAYS GAP LOW OF 5260. THE BREACH OF GAP LOW FOLLOWED BY  A MOVE UP TO CLOSE ABOVE MONDAYS GAP LOW WILL INDICATE BIGGER UP MOVE OR ELSE ONE MAY EXPECT NEXT FEW DAYS OF GRINDING PROTRACTED MOVE TILL SUCH TIME NIFTY MOVES UP TO HIT HARD THE 11TH JULY HARM AT ITS BACK. THE ATTRACTIVE GAP FROM THE  CLOSE OF 11 JULY AT 5306 TILL THE 12TH JULY HIGH OF 5260 SPOT IS HALF COVERED ON MONDAY, THE OTHER HALF OF GAP TILL 5306 SPOT HIS HIGHLY VULNERABLE AND WILL ATTRACT BULLS TO FALL PRAY TO THE WAITING BEARS  PROTECTING THE GAP.

INTRADAY TRADERS MAY FIND GOOD SHORTING OPPORTUNITY IN CASE NIFTY  SPOT MOVES UP TOWARDS HIGH OF MONDAY AND FAILS TO MOVE MUCH HIGHER THAN THE HIGH TO HAVE A GOOD LOOK AT THE BOTTOM AROUND 5300. ENTERING MONDAYS GAP LOW OF 5260 SPOT LEVELS & SUSTAINING  BELOW THE GAP LOW ALSO WILL OFFER GOOD SHORTING OPPORTUNITY.  FOR FUTURE TRADERS OF NIFTY FUTURE, ONE MAY PLAN TO TRADE SHORT IN CASE NIFTY FUTURES WHICH HAS CLOSED AT 5290 ON MONDAY FAILS TO MOVE UP AND SUSTAIN ABOVE 5315 TO 5325 FUTURE ZONE  WITH A REASONABLE STOP LOSE ABOVE THE ZONE TO ENJOY THE REVERSE TRADE. SIMILARLY ON THE DOWN SIDE IN CASE OF A FALL IN NIFTY FUTURES TOWARDS  5265 TO 5255 ONE MAY PLAN LONG TRADES WITH STOP LOSS BELOW THIS ZONE TO ENJOY THE REVERSE TRADE.

ALTHOUGH THE CLOSURE OF SPOT NIFTY AT 5282 ABOVE ALL THE INITIAL RESISTANCES OF 5246, 5258 AND 5268 ARE HIGHLY BULLISH SIGNALS TECHNICALLY, AS IT HAS BREACHED THE NECK LINE OF THE REVERSE HEAD & SOLDER AS CAN BE SEEN IN THE CHART ABOVE, YET ONE HAS TO BE CAUTIOUS, AS THIS ALSO OFFERS THE IDEAL OPPORTUNITY FOR OPERATORS TO TRAP EVERYBODY & THE 11TH JULY SITTING AT THE TOP WILL SUPERVISE THE OPERATORS’ ACTION BELOW IT TO ENSURE THAT THE BULLS  DO NOT EVEN LOOK AT THE BOTTOM LINE AT 5300 SPOT LEVELS. IT LOOKS ATTRACTIVE FOR OPTION TRADERS TO BUY SOME PUTS OF 5200 ON THE RISE OF NIFTY AND CARRY THESE TO ENJOY THE REPELLING FORCE OF THE SHORTERS.