I just came back from a party, so thought let me recap today’s Nifty action in a jiffy. We had a wee bit of gap up, promptly filled, and then no looking back. Every rise in Nifty was meticulously, followed by sideways consolidation. It was step by step approach, which took us to the day’s high, where some profit booking was seen. From the chart above we can see, though the Nifty made higher tops, the oscillator below traced lower tops. Sign of bearish divergence and an opportunity to short (unfortunately we never got a convincing short). This is where basic knowledge of the Dow Theory lends a helping hand. If u observe, throughout the day we made a series of higher highs and higher lows. Never was this series broken till we made our first lower low at about 2:55 p.m. And personally I feel, after that we had to make a lower high, to safely assume, that the trend had reversed for the day, and an opportunity to short convincingly. In my view, we have still kept the option of taking out the higher high at the close of the day. In my humble opinion I feel, friends who want to make trading a profession, please start reading. I leave you tonight with yet another quote:
‘‘A traveler without knowledge is a bird without wings.’’
Sa’di, Gulistan (1258)
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