Most of the times : we justify a position by virtue of news flow , but initiate the position looking at the price action .
Lets clear “The Thought Process”:
- We don’t know what events come up when
- We can bet on data , but lets keep that separate from the buy or sell decision
- The only news flow that hits everyone by surprise is NATURAL DISASTERS , citerus paribus
Its good to know whats happening in the world and that we have an opinion on it , but barring point 3 , lets make decisions based on process actions alone . The only decisions before we initiate a position should be :
- Stop Loss
- Take Profit
The NIFTY is at a crucial juncture : No one Really Knows whether the upmove from 7520 will take us to 7950 & above or the market will kiss 7780 and revert to 7320.
My thoughts below:
But the market may move by a large amount Intraday. To play the move two strategies can be adopted. Intraday :
- Short in the range 7735- 7745 with stops at 7785. Target would chase 7610. Dont forget to reverse at close keeping the lines in mind.
- Long in the 7680 – 7725 zone with Stops at 7675 . Target would chase 7950 .
I will rather go with the second .