Fundamental News
- European Central Bank assured of loose monetary policy, vowed to buy more bonds.
- US$1.9 Trillion stimulus bill signed by President.
Global Markets
- US markets are higher. ✅
- Asian markets are higher. ✅
- SGX Nifty is showing a gap up of more than 200 points. ✅
Pre-Market View
SGX Nifty indicates yet another gap-up opening. We have three positive ticks indicating good global cues. As the gap is too-high, there would be some sort of selling pressure at the open. Hence gap-up short is always in play. However, the selling may stop at half the gap, form a base and rise again completing a pole-flag pattern.
Intraday Trade Setups
Gap-up Short:
- Both Nifty and Bank-Nifty opened gap-up of around 1%.
- Nifty produced a red candle whereas bank-nifty produced a green candle on opening 5min.
- At 09:30 am, nifty broke below its intraday low creating a short opportunity.
Pole-Flag pattern:
- After a bout of selling pressure, markets were looking good for recovery after forming a base.
- At 11: 30 am, both nifty and bank-nifty created a power candle and broke above the trendline.
- However, there was no follow-through and the pattern failed creating another opportunity.
Range-Breakout:
- This was more of a pattern failure opportunity. The longs trapped in the above setup would have to sell driving the market lower.
- At 12:10, both nifty and bank-nifty created another intraday low, breaking below the base of support.
Trade Plan for Next Session:
- Today markets were trendy to the downside ignoring all supports.
- Today, FIIs were net sellers for 163 crores while DIIs were net sellers for 942 crores.
- Markets were expected to bounce back after initial gap-up selling pressure. However, the markets continued trending lower which came as a surprise. Going forward, global market cues would be important.
- If markets open gap-down or flat, markets may trend to the downside.
- If markets open gap-up, they may may remain range-bound after testing today's low.