InvestorQ : Nifty surged past the 10k mark for the first time after 3 months, what should be the trading strategy?
Nishita Gala made post

Nifty surged past the 10k mark for the first time after 3 months, what should be the trading strategy?

Answer
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3 months ago


Strong foreign flows and a number of large deals and some encouraging results drove Indian equities materially higher. Nifty surged past the 10k mark for the first time after 13th March. Market activity was way above average with strong volumes, traded value, and market breadth. Small caps outperformed the market materially. Financials led the market rally with PSU Bank gaining over 22%. Media and Realty were other top gainers. Pharma and FMCG were notable underperformers. Volatility was lower. Bonds gained and INR was unchanged.

The surprise job data in the US, positive economic data in China, and flattening COVID-19 curves in most countries, triggered a massive risk rally in the global markets. Equities registered strong gains with European benchmark rising ~11%. Crude surged, while precious metals stepped back. USD and Bonds were weaker. Volatility eased further.

The near and short term outlook and trend for Indian equities have improved materially over the past two weeks. The daily and weekly trends are not positive while the monthly trend remains neutral. The momentum has slowed down indicating less probability of any dramatic change in outlook and trend in the near term.

For this week :
The day traders may avoid trading in 9958-10210. Above 10210, the traders may adopt buy the first strategy; and below 9958 sells the first strategy may be used.
The long Nifty position must be held with a stop loss of 10017 on a closing basis. For short positions, stop loss would be 10331.
For Bank nifty, stop losses would be 20640 and 21520 respectively. All prices spot.