Why is it Going to be Tough for Trend Traders

Why the PullBack Today Post Results may not be a great news for Trend Traders

As again markets seemed to prove again to be ahead of the elections and the subsequent results. Now since the event is done it will be crucial to try and analyze the potential direction of the markets post the results.

In our various posts for the past week or so we had mentioned that 7950 is a potential downside target and break of that could only signal another downside trend. (http://tinyurl.com/nus8van)

The fact that markets scaled back to the levels despite a sentimental gap down proves how important that zone is. Also the fact that it didn’t take it out yet means bears may still be remotely hopeful for a potential resistance.

But what it does is brings us back to the congestion and directionless zones of 7900 on the downside and near 8150 on the upside. This will mean for the coming few sessions until either of the levels is cleared trend traders are going to find a tough time ahead.

NIFTY Futures- Post Results Trading ideas

This is also confirmed by the fact that despite expected volatility the INDIAVIX( indicator for volatility) today fell sharply and corrected -12.5% on an intraday basis.

The good part is for discretionary contrarian traders this may provide good pull back trade opportunities at a low risk with either of the upper or lower band as a stoploss.

If you intend to still trade the trend advice would be to wait for a clear of either of the levels on the upside or downside and you will get your move.

Stay updated on market analysis and potential trade ideas at either our facebook page (https://www.facebook.com/powertrade.trading) or our twitter handle (@powertrades)

Wish you all a very happy safe and a prosperous festival of lights ahead