India’s benchmark Nifty Futures opened gap down around 11407 approx. The index tanked 90 points, as institutional sellers were present in the market today. During the 2nd half, the index witnessed choppy moves due to profit-booking by the institutional sellers. The big question is, will selling continue?
Will Selling Continue?
In Today’s session, Nifty has recovered 40 points from the low at 3:30 pm and closed at 11352. Today’s recovery was triggered by profit booking in intraday short positions by today’s institutional sellers. Traders must keep in mind that today’s fall was an isolated move and has no connection to the selling that happened on Friday. The 3D Delta System is indicating, tomorrow’s range high will be the critical pivot point where fresh selling might be initiated again. However, if Nifty trades above tomorrow’s range high, it will trigger short-covering moves even if the institutional buyers are not present in the market. Interestingly, even if Nifty slips below tomorrow’s range low, it will need the participation of new institutional sellers for fresh selling to be triggered. If new institutional sellers do not participate at the range low, the index will witness a sharp bounce back.
What Are The Odds Of A Trend Reversal
Although the odds of a trend reversal are very slim, traders need to keep in mind that Nifty has already fallen 688 points in the July contract. Thus there is a strong possibility of short covering if the index trades above tomorrows range high.