NIFTY : Trading Levels and Plan for 21-Oct-2024Nifty Trading Plan for 21st October 2024
In the previous session, Nifty saw a rebound from the lower levels around 24,636, showing signs of buying support, but faced resistance near the 24,882 level. The index is currently hovering around the "No Trade Zone" of 24,794-24,882, where price action can be choppy and indecisive. For the upcoming session, the price movement will depend on the opening scenario and Nifty’s ability to break above or below these key levels.
Gap-Up Opening (200+ Points):
If Nifty opens above the 24,959 resistance zone, traders should wait for the price to break and sustain above this level. The next target will be the last resistance at 25,064, and any breakout above this can lead to further upside potential towards 25,279.
Long positions can be considered above 24,959, targeting 25,064, with partial profit booking near 25,064 and then looking for further upside momentum.
Watch for signs of exhaustion near 25,064 or 25,279, as a sharp reversal could occur after testing these resistance levels.
Place a stop-loss below 24,959 for long positions to protect against sudden reversals.
Flat Opening:
If Nifty opens flat near 24,862, it’s crucial to observe the price action in the "No Trade Zone" (24,794-24,882). Avoid trading within this zone as it could lead to whipsaws.
A breakout above 24,882 can offer a buying opportunity with an upside target towards 24,959-25,064.
A failure to break above 24,882 may result in a retracement towards 24,794, and if this level breaks, Nifty could slide further towards 24,636, where buying support is expected.
Stop-loss for long positions should be placed below 24,794, and for short positions, consider 24,882 as your stop-loss level.
Gap-Down Opening (200+ Points):
If Nifty opens with a gap-down near or below 24,636, the first key level to watch is the support zone between 24,636 and 24,338.
A move below 24,636 should be traded cautiously as it could lead to further downside, targeting 24,338 as the next support level.
In case Nifty finds support near 24,636 and reverses, traders can consider long positions, but wait for confirmation of a sustained bounce.
Stop-loss for long trades initiated near 24,636 should be placed below 24,636, while for short trades, stop-loss can be kept just above 24,794 to manage risk effectively.
Risk Management Tips for Options Trading:
In volatile market conditions, consider using strategies like debit spreads or iron condors to limit risk exposure while aiming for profitable trades.
Avoid taking naked options positions during gap openings as premiums can fluctuate rapidly. Instead, opt for hedged positions.
Monitor key levels for premium erosion in case of time decay, especially near expiry. It’s crucial to book profits early or roll over positions if key levels like 24,959 or 24,636 are not broken.
For intraday options trades, manage positions by placing a stop-loss based on underlying index levels like 24,882 for calls or 24,636 for puts.
Summary & Conclusion:
For 21st October, Nifty’s key levels to watch are the "No Trade Zone" between 24,794 and 24,882. A breakout above 24,882 could push Nifty towards the 24,959-25,064 resistance zone, while a breakdown below 24,794 could lead to a retest of the buyer’s support near 24,636. Gap-up or gap-down scenarios should be traded cautiously, with proper stop-loss management at key levels. Traders are advised to avoid trading in the "No Trade Zone" and use hedging strategies for options trades to minimize risk.
Disclaimer: I am not a SEBI registered analyst. This plan is based on my personal analysis using technical parameters. Traders are advised to conduct their own research or consult with a financial advisor before making any trading decisions.
