Dated :- 10. 08. 2014

                                                                     NIFTY SPOT : 7588.55

Hi,

Readers,

Nifty did exactly the same as was mentioned in my previous blog word by word.

It was clearly mentioned in my previous blog that now Nifty will be volatile and move within the range of 7450 to 7750. Nifty was at 7602 on the date of my previous blog(i.e. Aug 03, 2014), when it was mentioned to book profits in short positions and it was also mentioned that Nifty will be volatile and would spend some time in 7450 to 7750 range.

Within the range one should always sell at higher point of range and buy at lower point of the range. Look the same happened Nifty gave the opportunity to sell again at higher end of the range when it made a high of 7752. And from there is fell more than 200 points in just 2- 3 days.

Readers should also remember that I mentioned in my previous blog (Last Paragraph) that, there is one condition for Nifty to continue its  –ve bias. And it is that, it should be volatile and should not close above 7750. Till it is closing below 7750 it can continue its bearish bias. See the same happened.

Now What :-

For non professional traders it is better to book profits from short positions again for once as they are getting handsome profit in no time. For professional traders they can book part profit here and can hold their balance short position with trailing stop loss of 7700 closing basis.

Although Nifty has given initial breakdown with gap on charts which is considered bearish. But the structure of Nifty is indicating one should wait for the follow through of that gap breakdown. Thus it is only professional traders who can bear the volatility, can trail the short position with trailing stop loss of 7700 closing basis.

If the follow through does not come then it is recommended to book complete profits from all the short profit and wait for the next trade to come. As it will indicate that Nifty is again stuck in a range. And not in a hurry to come down and in that case it may even rebound.

Why to wait for the follow through :-

If Nifty does not give follow through and close even above 7630. Then it will be the first indication that Nifty is not inclined to come down. And the overall trend which is up till now will sustain for some more time. And Nifty may even rebound from there.

Important point I would like to mention here is that short term traders can play the small range of 7530 to 7630. Blow 7530 trade with bearish bias and above 7630 trade with bullish bias.

Next major support for Nifty is at 7450- 7400. And resistance is at 7700- 7750.

Major breakdown in Nifty is comprehensive close below 7450 and till it holds Nifty can rebound any time.

Trade accordingly.