Intermediate trend is in control.

Once the Nifty fell below 5050 which was the low of the wide range bullish bar, to me, the intermediate trend asserted itself, with the relief rally over. I have trend short positions continuing for the past many weeks. A panic bottom is probably required to reduce short side exposure. So far, that has not come about.

Failed patterns: The Nifty was making a bullish head and shoulder which did not come about. In the same fashion, a number of stocks were having similar bullish patterns. With the collapse of the Nifty, individual stocks have (a) gone through similar failures or (b) have seen declines but prices remain above the right shoulder therefore the pattern is not yet cancelled. In either case, it is the Nifty which controls the overall sentiment, therefore, buying is best avoided.

The Nifty has seen two successful ORB (opening range breakout) days – on Tuesday, and, Thursday. This is as good as it gets. After trend days, intraday choppiness is usual. While there is no rule, I would think that we may be in for a number of days with choppy intraday movements.

Mid day musings

For the swing trader, there are signs of buying emerging in the Nifty.  As I write this at 1.42 PM, the signs are only tentative, but I have picked up Nifty and Bank Nifty calls based on the upturn in short term momentum. If the market closes weak, I may exit these positions today itself.
I maintained my short positions while the market moved up. In previous posts, I have explained that I keep these positions in a seperate settlement month so as to keep a dividing wall between swing trades and position trades.
I do not have any confusion on the trend – we are in a bear market. Yet, for short term traders, there are opportunities on both sides, depending upon the environment.
In my early morning post, I had mentioned that today was likely to be choppy, therefore I did not consider any ORB trades.
Gold is now trading in a narrow range. I am tracking the end of day charts, waiting for a clear pattern. I will post my charts over the weekend.