June 08,2020 Trade setup- Trade carefully;Risk-on rally leaves Nifty at high risk.

The typical characteristic of a risk-on environment, where a gush of liquidity chases any asset class, is that it continues to defy technical levels. Nifty has risen in seven out of the past eight sessions and is now overdue for some correction or consolidation from current levels. Since liquidity continues to chase equities, the targets at higher levels become somewhat irrelevant and traders should continue to keep trailing stop losses as they follow the rally

The 10,300-10,325 zone is where Nifty has a probability of exhausting itself. This is the place where the upper rising trend line of the current channel meets the 100-DMA, which currently stands at 10,319. For Monday’s session, the 10,180 and 10,245 levels are likely to act as immediate resistance, while supports will come in at 10,090 and 10,000 levels.

Overall, despite the ongoing up-move, Nifty has continued to show signs of exhausting the momentum of the current up-move. In the event of Nifty inching higher, the 100-DMA level, which currently stands at 10,319, is likely to act as a major short-term resistance for Nifty on a closing basis. We reiterate approaching the market with a great deal of caution and chasing the trend only with strict trailing of stop losses as the market remains highly prone to profit-taking at higher levels.

Nifty Bank (21035) Resistance exists around 20927 and downside to 21110-19895 is a possibility’ the Nifty Bank opened in the green and traded up to close in the green…technically now the next logical target would be 22418 as long as 20300 holds…
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