⚡️Reason 1 : DOJI on daily timeframe.
We had informed last night in our daily market view that we have a DOJI forming on daily TF. And this DOJI has formed after a clear downtrend from past days. We know DOJI means 2 things either trend reversal or Pause in prior trend. In simple words, it means selling can take a pause. Fresh shorts should be avoided.
⚡️Reason 2 : MMI in extreme Fear zones
This tool has been quite good in at least helping us avoid fresh shorts and focus on longs more. Whenever MMI tends to go below 18 you should generally avoid shorts.
⚡️Reason 3: INDIA VIX
Yes, technical analysis works on India VIX too.
We clearly see VIX was at an important resistance zone, at the same time #Nifty was hovering at 15700 regions and forming a base.
⚡️Reason 4 : PCR ratio below 0.70
We don’t follow it rigorously, but basically whenever PCR goes below 0.70 . 1 or 2 out of 10 times market might fall more but 80% of the time we won’t see a follow through selling.
So we had 4 reasons to go long and no reasons to go short. This is what trading is in a nutshell, while everyone in a falling market keeps on looking for next support. Money is not made by following the herd we need to think different a little. Also in High VIX environments like these strangles are sold a lot as they contain high premiums and any fall in VIX melts the premiums of puts rapidly and retail who buy calls to catch the recovery even their premiums don’t increase much due to VIX crash.
We hope this analysis makes sense to all of you guys. Trading is a probability game when we have 4 factors favouring long side and none to go short.
We will always choose to always take longs since we have a confluence of 4 factors thus increasing the Success rate of our Trade.
You guys can hit that like button if you liked this analysis. We only write threads with a single aim that is should be useful immediately and it should add some kind of value in your trading.
