NIFTY Nov First Week

1 Kas 2020

The coming week is a very very volatile week. There is the Bihar election, London and Paris have declared a lockdown and there is the US elections. If you have faint at heart, I recommend that you stay out of market next week. The last two trades have been profitable and you can choose to enjoy that. I am also a little faint at heart, so maybe we can try buying options instead of futures.

Long Term: In the long term, winter is coming! There is a downtrend coming. The Wave 3 of the july-started rally wave seems to be over. Then Wave 3 of the June-started rally might also close. Thereafter the March started rally might also close. The market has already formed a triple top.

Medium Term: The wave 4 of the july-started rally seems to be about to reach its conclusion. That could be a feeble upwave in form of the fifth wave that would end the july-started rally. That would also mark the end of the powerful third wave of the june-started rally. Lets brace for the movement.

Short Term: The fourth wave seems to be unfolding. There is one doubt though. We are not sure if it is a flat of a zig-zag. The three waves required in first leg of the fourth wave seems to be done. If there are two more waves, then it is a zig-zag which could lead to even more decline. If it is a flat, then the market might rise dramatically in the second leg of the fourth wave. Since the second wave was shallow complex, by the principal of alternation, the fourth wave should be simple and deep. That would mean a zig-zag. That would mean a deeper correction. We will find that as time progresses.

How would I trade this? I would buy a put option with the strike price of around 11,690 and 11,640 at market open on Monday. I would exercise the put option at around 11,500 or 11,455.

As always, I might be right. I might be wrong. I am always learning. Trade at your own risk.