Dated :- 02.10. 2016                                 NIFTY SPOT : 8611.15

First of all

"HAPPY NAVRATRAS TO ALL"

May "Godess Durga" shower her blessings on everyone of us.

KUDOS again, Nifty fell exactly as was mentioned by me in my previous blog. Nifty hit all the targets for the week on the lower side.

The level of 8781 which was mentioned by me in my previous blog dated Sept. 25, 2016 acted as the magical level and when Nifty went below 8781 it never looked back and it kept on falling. It was clearly mentioned in my previous blog that 8781 will act as trend decider and if Nifty goes below it then go short. Same happened.

It was also mentioned that Do not expect this expiry week to be dull one, rather expect this expiry week to be action packed week. See how action packed the week was.

This is the power of technical analysis.

It is all God's Grace.

Readers would have enjoyed the fall in Nifty and profits.

Now What :-

As I always say that Profit Woh hai jo Ghar Aa gaya.

Book part profits here at least 2/3rd of the quantity profits should be booked here.

And keep the balance short position open with the wild stop loss of 8950 closing basis.

Even with this stop loss the trade will end up in profits as readers would be booking around or more than 200 points profits in 2/3rd part so the balance 1/3 part can be kept open with the stop loss of around 170 points from cost. And since the Oct. expiry had 40 points premium thus the effective stop loss shall be of 130 points only from the cost for the balance 1/3 rd quantity. Short positions has the benefits of roll over premium.

Why we want to trail 1/3rd part of the position in spite of the fact that handsome profits are there. Because the pattern Nifty is making is signaling that the level of 8968 which Nifty has touched in its current move might prove to be the top for the present upmove. Also   :-

          1. The trade will still be in profits even if by chance Nifty close 

              above 8950. And we can exit even earlier also if Nifty starts 

              showing any major upside strength.

         

          2. The structure Nifty and Mid cap Index and some other charts

              has made are important structures and patterns together

             with the combination of various indicators. And we want to 

             play those bearish structures and if they continue they will

             open the downside further.

Because the pattern Nifty and some other indexes has made are good bearish pattern. Till the time Nifty does not nullify those patterns and structures, we would expect that downside in Nifty will remain open and it will be vulnerable to downside risks. 

The pattern gets violated at 8894 closing basis. But after adjusting it with other corresponding levels of some other charts, indicators and safety factor the stop loss level of 8950 closing basis comes to be the best stop loss to trail Nifty for downside. Stop loss may seems to be long from here but from the cost it is virtually 130 points and it is for only 1/3rd quantity and after the RBI policy we will think of trailing it down to a smaller one.

Also do remember that we have RBI policy on Oct. 4, 2016 where the rate cut hopes are high. Thus the volatility also justifies to book 2/3rd profits and trail the balance 1/3rd part with the above mentioned stop loss.

Another observation I would like to share with readers that Nifty has taken support at 8555 which is very important support level. It is the conjunction point of support from 3 channels all are around 8560 level. Where 3 channels combine that becomes important level together with the fact that 8520 to 8550 was previous important support. Thus for once Nifty respecting these levels is very much justified. Real test will be when Nifty breaks it 2nd time and closes below 8550.

Enjoy the profits and trade accordingly.

  

Note :- All Levels are Nifty spot levels always.

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