Introduction:
Nifty has been consolidating within a defined range, with 23,622 acting as immediate resistance and 23,490 providing opening support. The "No Trade Zone" marked around 23,557-23,622 highlights areas of indecision where price movement lacks clarity. This trading plan evaluates different opening scenarios, including gap-up, flat, and gap-down openings, considering a gap of 100+ points.
Scenarios for 10-Jan-2025:
- Gap Up Opening (100+ Points Above 23,622):
If Nifty opens above 23,622:
Monitor Retest of 23,622: A retest and hold of this level can be a potential opportunity to go long, with the first target at 23,787 and a stretch target at 23,843. Place a stop loss below 23,600 to protect capital.
Failure to Hold 23,622: If the price fails to sustain above 23,622, expect a correction toward 23,557. Wait for a reversal signal before taking any fresh positions.
Options Trading Tip: For a gap-up opening, consider buying call options close to the money if 23,622 holds as support. Avoid buying options with low liquidity. - Flat Opening (Near 23,557):
If Nifty opens near 23,557:
Focus on Breakout or Breakdown: Let the price action settle for the first 30 minutes. A breakout above 23,622 offers a long opportunity, with targets at 23,787-23,843.
Break Below 23,490: A breach of 23,490 could lead to a bearish move toward 23,364. Avoid long positions unless there’s a recovery signal around 23,490.
Risk Management Tip: Use proper position sizing. Avoid risking more than 2% of your capital on any single trade. - Gap Down Opening (100+ Points Below 23,490):
If Nifty opens below 23,490:
Watch for Reversal at 23,364: This support zone may attract buyers. Look for bullish reversal patterns to go long, targeting 23,490.
Break Below 23,364: A breach below 23,364 could lead to a significant downside toward 23,251. Aggressive short positions can be taken only after confirmation with a stop loss above 23,364.
Options Trading Tip: For a bearish gap-down, consider buying put options near resistance levels or selling call spreads for a safer risk-reward ratio.
Summary and Conclusion:
Nifty’s price action around 23,622 and 23,490 will determine the market’s trend for the day. Avoid trading within the "No Trade Zone" (23,557-23,622) unless a clear breakout or breakdown is visible. Risk management is key, especially in volatile conditions. Always use stop losses and stick to your trading plan.
Disclaimer:
I am not a SEBI-registered analyst. This trading plan is for educational purposes only. Please consult your financial advisor before taking any trades. Trade responsibly.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.