Bigger rally in the offing once Nifty crosses 8350:Sukhani

Latha: Do you think the rally has legs? If yes what is a long trade and obvious trade in the morning?

A: A long trade is an obvious trade in the morning. In spite of the fact that the Nifty is likely to open with another gap, the trade is to be on the long side of the market. If you have short positions, you must cover them up, you should then take a long trade just after a cooling off period of the open.

Now the difficult answers are, is this rally going to be sustained? We want the market to tell us that. There is a very strong resistance in the 8,350 area. So from here to 8,350 seems to be a reasonable proposition that we should reach that level. At that point, the market will decide whether they want to go in for a much bigger rally. If we cross that threshold successfully, there is a bigger rally in the offing.

Latha: Is that for an intraday trader, what would the advise be for someone who trades for the contract or for a couple of months, a positional trader?

A: The advice is a same; you must go long because there is sharp trend reversal so we have to be on the long side. If 8,350 is taken out, we add to our positions. If it is not then either we will get out or may be we won’t be able to get out. We will find what happens. For a positional trader, we will assume that we could see a bigger rally.

Latha: People who would have gone long or even holding long positions are at an advantage but even at 8,240 there is scope to go long?

A: That is the only trade; we either go long or step aside. It is worthwhile taking a long position. This market is in a trading range and the short-term is pushing on the outer boundaries of that range. It is anybody’s guess whether it breakout, whether it consolidates, stalls or actually comes back or may be simply spends time here. If there is a trade in the market it is that we look at the two days of rallies, the second half of Thursday and Friday and go long. There is no other trade.

Latha: We never asked you your trade on the Bank Nifty. Today it is just in step with the Nifty itself but is there a separate trade?

A: Yes, fortunately there is. You go long in the Bank Nifty, your stops are roughly around 17,500 and then you wait for the Nifty to rally. If the Nifty rallies and the Bank Nifty goes in step, good for it and the same resistance levels are coming in the Bank Nifty around 18,500. However, that is the Nifty for 8,350. We haven’t crossed those thresholds and we don’t know what will happen. If we want to be in the market and we should be, we just take position on the long side and watch.

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