Nifty trend today / Nifty prediction today 18th Feb 19
Nifty trend today was eventually flattish and closed the day mildly in the red but during the trading day Nifty was at one point over 100 points lower however Nifty recovered and closed the trading day flat and hence nothing has changed they are many traders and investors who are considering the current fall as downtrend however in my previous update we have clearly mentioned that please look at larger time frame for e.g. monthly since Oct the Nifty trend has been sideways between 10000-11000 and then since dec or mid nov Nifty trend has become more narrow and now the immediate trading range for the Nifty is between 11000-10600, now many will assume that if 10600 breaks the longer down trend will resume well the answer to that lies in what happens after 10600 is taken out there will be many parameters that will have to be seen very closely for e.g. will the level of 10600 break with higher volume if there is no higher than average volumes in the breakout it could turn out to be a false breakout below 10600 and it will be very similar to the breakout that took place above 11000 so Nifty just broke 11000 created a bull trap and then moved lower and the very same set up is possible if there is no volume breakout on the downside so there could be a possibility of a bear trap taking place. As per my Nifty trend analysis / Nifty prediction we do not see much logic in short selling Nifty for the time being let the trading range breakout and then we will get much better trading opportunities.
From a near term perspective there are some important support areas just around 10600 level and if they hold out then we could still continue trading in this trading range for the next few weeks as we have mentioned in our past updates that even the events of budget and RBI credit policy have not been able to break the trading range so in such a scenario it will be interesting to see what sort of news flow comes which will break this trading range so till the trading range is not broken we should look at stock specific opportunities for trading and at the very same time also look to build a high quality portfolio because there are many stocks where deep value has emerged so look to buy into those deep value stocks with good management and buy in a staggered manner. We see some of the names that we have bought giving anywhere between 30-50% returns within this calendar year because most of the stocks that we have bought in our portfolio we see earnings have bottomed in those companies also most of those companies are at dirt cheap valuations and the business cycles for those companies is at the bottom so look at buying into your portfolio where deep value has emerged.
As usual if you are only trading on the basis of this post please use your own risk management and then only trade please do not over trade and always keep your risk in check.
Good trading to you!