Tuesday, September 21, 2010

Trade Plan - September 22, 2010

VWAP is 6010.30 and volatility is 0.92.  Nifty opened with a breakout above 9015 in early trades and went on to touch 6032.80 in spot and 6046 in futures and then lost momentum thereafter with a sharp fall to 5962 level and the long trade between 5970-6018 of spot levels worked today.

1) Significant resistance observed around 6018 levels and premium on Nifty futures shrinked considerably. Hence tomorrow, playing the opening range breakout above 6035 only with a strict stop loss of 6010 would be a good strategy for longs with probable target of 6067-6090.
2) Another probable scenario is that Nifty consolidates between 5970-6050, but close should be above 6040 for the bullish momentum.
3) A break below 5970 could trigger a fall up to 5940-5910-5890 and futures could well trade at a discount around these levels indicating a consolidation phase before the September series expiry and rollover of positions to October series will start soon. This scenario could play out most probably with a gap down opening. Of note, the 5-DEMA levels is now 5916.

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