Trading Plan for Tuesday, March 26th, 2024Trading Plan for Tuesday, March 26th, 2024
Market Sentiment: Cautious, consolidation after rally
Weekly Volatility Risk: High
Supports to Watch:
Immediate Supports: 5274-76 (major), 5267, 5263 (major), 5257, 5247-51 (major), 5243, 5235, 5228 (major), 5221, 5217, 5212, 5200-03 (major), 5194, 5190 (major), 5179, 5171, 5167 (major), 5163, 5152-55 (major), 5147, 5137, 5126 (major), 5115 (major).
Resistances to Monitor:
Key Resistances: 5281, 5288 (major), 5292, 5299-5303 (major), 5307, 5311, 5316 (major), 5320, 5329, 5337 (major), 5346, 5351, 5356 (major), 5364, 5371, 5380, 5386 (Major), 5392, 5408 (major), 5416, 5426, 5434-37 (major), 5443-5446 (major).
Trading Strategy:
Tight Range: Be prepared for continued choppy trading within the range defined by the multi-day flag structure. Trade with caution and focus on range-bound strategies or consider sitting out.
Flag Structure: Observe the bull flag structure with support around 5274-76 and resistance near 5288 and the 5300 zone. A decisive breakout or breakdown could provide a clearer directional signal.
Long Opportunities: Look for potential long entries at 5274-76, particularly after a retest and reclaim. If this level fails, be extremely cautious about longs and consider bids only at major support levels like 5263 and 5247-51 (triangle back-test). Watch for failed breakdowns for added confirmation.
Short Opportunities: Counter-trend shorting on strength carries significant risk, particularly within the flag structure. Use extreme caution if considering shorts near 5288 or the 5300 zone. Watch for signs of a breakdown or retracement for better risk/reward entries.
Focus on Reactions: Don't force trades, be patient, and react to price action. Let price discovery unfold within this consolidation pattern.
Bull Case
Flag Breakout: A breakout above the bull flag resistance around 5288 and further above 5300 could signal a continuation of the uptrend, targeting 5316, 5338, and ultimately 5350+.
Support Holds: As long as 5274-76 holds, the bulls remain in short-term control. Look for potential add-on points if a breakout occurs, preferably after acceptance or a failed breakdown.
Bear Case
Breakdown Signals: Breakdown below 5274-76 could trigger selling pressure. Watch for shorting opportunities on failed breakdowns or bounces. Exercise patience as these setups often involve traps.
News: Top Stories for March 26th, 2024
GameStop Earnings: Focus on the GameStop earnings report and its potential impact on the stock market and meme stock sentiment.
Federal Reserve Updates: Stay informed about the Federal Reserve's interest rate plans and their impact on market sentiment, particularly concerns about a potential market crash.
Global Economic Developments: Monitor updates on economic conditions in Germany, the U.S. housing market, and the China-U.S. trade dispute.
U.S. Economy: Analysis of the U.S. economy's resilience, and the implications for the Fed's possible rate cut plans.
Stock Market Performance: Track stock market movements, including updates on the Sensex, the Nifty, and the impact of new home sales data in the U.S.
Banking and Regulations: Examine the impact of Basel III regulations on the APAC banking sector and the outlook for emerging markets.
U.S. Fiscal Policy: Consider the CBO's warnings about rising U.S. federal debt and the increasing cost of debt servicing.
Remember: The market is consolidating after a strong rally. Be adaptable, manage risk, prioritize capital preservation, and always prioritize reacting to price action over any predictions.
