Nifty sees a breakout.

One of the nice things about technical trading is our flexibility. Rather than tell the market what it should do, technical traders follow the market. While this is difficult to do, in the long run, it pays money.

The Nifty was in a trading range between 2555 and 2755. A close above 2755 today was a clear signal that the Index is breaking out from the range. The target for this breakout is 2950. Traders should be long at close of trade today. What is the stop loss? It is 2647 today’s low, or, 2555 the support line of the trading range. The two stops are for different trader profiles. The closer stop is for the swing trader, while the wider stop is for the position trader.

Is this the start of the bull market ?

Not really. It is possible that the Nifty may see a strong bear rally, reach 3200 and then start a drift down to 2000. I, of course, cannot say that this will happen, but there is a strong probability, so who knows ?
We should also be open to the possibility that the Nifty may be building a base at current levels that is between 2500 and 3200. The Index could move inside this range for many weeks, or even months.

So, how do we trade ?

The trading range breakout tells us to go long. Search for dips on intra day charts. Buy with proper stops. maybe we will get a tarditional year end rally. have fun!

Warren Buffet tells us:
“Cash combined with courage in a crisis is priceless.”