If you have been struggling with identifying the trend of the broad markets lately, you are not alone. Globally, there have been wild swings as economies and traders are trying to determine if equities are overbought or likely to continue to rise to new heights.
Through all of the noise of “experts” on television and in print, one thing will always tell the truth: the charts. We need to rely on our own analysis and use the core strategies of Online Trading Academy to find the best opportunities with the highest probability for success.
Focus on the basics of trend and start at the larger timeframe. Looking at the weekly Nifty chart, you can see that we have made lower highs and lower lows in price which suggests a downtrend beginning. The fact that price paused short of the demand of 5907 last week is not a good thing. Usually a pause before a supply or demand allows price to build momentum to break the level.
The daily chart is also bearish as we see the same trend shape. Additionally, the eight period exponential moving average (EMA) is acting as a bit of a trend line for the index. In bullish trends, price fails to close below the EMA. In down trends it fails to close above. Even in Friday’s bullish candle, we closed below that trendline.
As there is no strong demand on the daily chart until 5780, the focus should be on shorting opportunities when prices rally to supply. The moves upward seem to be corrective in nature rather than true buying pressure.
As always, protect yourself with stops when you take any trade. To learn more about trading like a professional, enroll in our courses at Online Trading Academy.
Neither Freedom Management Partners nor any of its personnel are registered broker-dealers or investment advisers. I will mention that I consider certain securities or positions to be good candidates for the types of strategies we are discussing or illustrating. Because I consider the securities or positions appropriate to the discussion or for illustration purposes does not mean that I am telling you to trade the strategies or securities. Keep in mind that we are not providing you with recommendations or personalized advice about your trading activities. The information we are providing is not tailored to any individual. Any mention of a particular security is not a recommendation to buy, sell, or hold that or any other security or a suggestion that it is suitable for any specific person. Keep in mind that all trading involves a risk of loss, and this will always be the situation, regardless of whether we are discussing strategies that are intended to limit risk. Also, Freedom Management Partners’ personnel are not subject to trading restrictions. I and others at Freedom Management Partners could have a position in a security or initiate a position in a security at any time.
Editors’ Picks
EUR/USD extends losses on dovish remarks from ECB members, trades near 1.0780
EUR/USD continues its downward trend for the fourth consecutive day, driven by a stronger US Dollar influenced by the hawkish market sentiment surrounding the Federal Reserve and expectations of prolonged higher interest rates.
GBP/USD trades sideways above 1.2600 amid quiet session
The GBP/USD pair trades sideways around 1.2622 during the early Friday. The market is likely to be mute in light trading on Good Friday. Later in the day, the US Core Personal Consumption Expenditures Price Index will be released.
Gold ends Q1 2024 at record highs, what’s next?
Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days. As this coiling up comes undone, investors can expect XRP to kickstart a massive rally.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.
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