Last week we have seen a very weak closing in Nifty futures, as a close below 5500 level for 2 days continuously. So we have now markets which has limited upside and huge downside, hence we are looking for selling opportunities as long as the nifty futures august series is trading below 5555 level. We recommend to trade short in Nifty futures below 5555 level for weekly target of 5410 and then 5333 levels, Traders must also place their trading stop loss above the 5570 level only on 2 days closing basis. It is sure that strong buying is not going to come in the broader markets next week. Taking a look at Open interest data states that there were huge short positions build up below 5555 levels also FII were the net sellers in the markets, they have sold about Rs.2000 crores worth shares in equity markets last week. Also charts suggest us near term trend is bearish and technical indicators interpret our entries are valid and so is our trade setup.
Our Trading Recommendation:
There is high probability that Nifty futures will weaken next week below 5500 level. Technically nifty is having a strong support at 5410 and 5333 level and resistance at 5555 and 5680.
Trading strategy for next week 1 August 2011:
Sell nifty futures below 5555 level for weekly target 5410 and then 5333 level. Also place stop loss above 5570 level on closing basis.
We Expect Nifty Futures to Touch 5410 Next Week.