NIFTY could extend this pullback beyond 22,150 on spot in a normal sinario! as I discussed yesterday as a short-term trader look to secure profits on shorts and prefer reentering on higher levels! So as expected MARKET have rallied from lows and once we go closer to 22,100 we would look to add positions for downside target objectives of 21,625 and 21,400 ideally in next few weeks!
NIFTY have allready fallen almost 800 points from the TOP without any negative developments in global markets! so from here to achieve targets below 21,400 it would require downside participations from global INDIces!
sooner or later we certainly would get that participation but as TRADERS we have to draw a line during which phase we want to get more active and during which phase we want to get less active! we now are in a phase where less activity is required!
FED MEETING triggered the rally on U-S-INDICES
something was about to happen post EVENT and we saw MARKETS move higher! fall in IMPLIED VOLATILITY in OPTIONS MARKET along with VIX expiration was a primary reason behind yesterdays upside! very much tactical in nature which is not unusual! Infact this IMPLIED VOLATILITY factor have always produced upside on all critical EVENT days “whether its (CPI) (NFP) or (FOMC).
that’s why we usually witness rally on those EVENT days! it have less to do with that EVENT itself! that sounds strange but since the inception of 0 D.T. OPTIONS this volatility crush post EVENTS have occurred regularly!
technically with a higher high above 5189 S&P could follow the exact PATTERN which NIFTY played out from 23rd,FEBRUARY to 11th,MARCH! eventually things would resolve on downside but as long as PATTERN supports are holding as TRADERS we can’t do much! but as ANALYST since PRICE and TIME have squared we can convince ourself that a REVERSAL is round the corner! whether that takes 2,days 4,days or 6,days that we would see going forward!
gann,insides 