The Swing may be up.

Yesterday evening, before the U.S. markets opened, I had suggested that day traders may have a buying opportunity today (thursday) since the Nifty has already seen two back to back down days. Now, as it works out, the American Markets saw the bulls taking control with big gains in all the indices.

This cheer is likely to help the Indian market get off on a decent start. Today should be a ‘buy on dips’ day for day traders, or even a swing trader who accepts the risk of an overnight position.

One method to enter the market today is the ‘morning range breakout’. You need to wait for 15 minutes to 30 minutes to let the market establish a morning range. Then buy above the high of this range, keep a stop below the low of the range. If you get stopped out, it is okay to make a second attempt if the markets do not fall much below your stopped out price. If you are stopped out twice, then you know today is not your day.

There are many ways to enter and exit the market. I just gave one example here.

The intermediate trend remains down, therefore the buy positions are essentially short term. Do not overstay your welcome.

The Other Side:

It is possible that the Indian markets may not respond to the American gains. Remember, the markets can do whatever theyw ant. On such days, I usually stay away if I do not get a trade of my choice. You have to develop your own ways.

Written at 9:19 AM before the open.