NIFTY : Trading Plan and levels for 06-Dec-2024

Trading Plan for Nifty – 06-Dec-2024

Intro to the Previous Day's Chart Pattern:
On 05-Dec-2024, Nifty exhibited a volatile session but from the level (excatly where I mentioned in yesterday's trade pan) a significant rally towards the Wave C completion zone but a huge volatility in the prices seen in the last trading hour, . A sharp rejection from this zone reinforced bearish pressure, driving the index back to the Opening Support/Resistance zone at ₹24,697. The chart highlighted three critical zones:

Red Trend: Bearish resistance around Wave C completion (₹25,050).
Yellow Trend: Sideways consolidation in the Opening Resistance Zone (₹24,882–₹24,697).
Green Trend: Bullish momentum originating from the Initial Support Zone (₹24,412).
Trading Plan for 06-Dec-2024

1. Gap Up Opening (+100 Points):
   
   If Nifty opens above ₹24,882, it will likely face immediate resistance at the Wave C completion zone (₹25,050).
   
   Action Plan:
   
   Look for bearish rejections or reversal candlestick patterns near ₹25,050. A failure to sustain above this level indicates a shorting opportunity, targeting ₹24,697 and ₹24,412.
   If Nifty sustains above ₹25,050 for at least two 15-minute candles, it signals a breakout. Go long, aiming for ₹25,300 and ₹25,450.
   Risk Management Tip:
   Use a trailing stop-loss once the trade moves in your favor. For options, consider selling OTM puts below ₹24,700 to benefit from time decay.
   
   
2. Flat Opening (Near ₹24,697):
   
   A flat opening will test the Opening Support/Resistance zone (₹24,697).
   
   Action Plan:
   
   If Nifty holds above ₹24,697, expect a bullish move towards ₹24,882. Breakout above this level can lead to ₹25,050.
   Failure to sustain ₹24,697 could drag Nifty towards the Initial Support Zone (₹24,412). Monitor for price rejection at ₹24,412 for potential long entries.
   Risk Management Tip:
   For flat openings, avoid aggressive entries. Let the first 30 minutes establish the trend, then act accordingly. Use spreads (e.g., bull call spreads) to cap your risk in options.
   
   
3. Gap Down Opening (-100 Points):
   
   A gap-down opening near ₹24,412 or below will test key supports.
   
   Action Plan:
   
   If Nifty finds support at ₹24,412, look for bullish price action. Enter long positions targeting ₹24,697 and ₹24,882.
   If Nifty breaks ₹24,412, the next critical zone lies at ₹24,224–₹24,142. Watch for signs of demand in this deep retracement zone for potential reversals.
   Risk Management Tip:
   In case of high volatility, trade with reduced position sizes. Use iron condors or straddles to take advantage of elevated option premiums during gap-down scenarios.
   
   Summary and Conclusion:Resistance Levels: ₹24,882, ₹25,050
   Support Levels: ₹24,697, ₹24,412, ₹24,224
   Key levels to watch: A breakout above ₹25,050 or a breakdown below ₹24,412 will dictate intraday momentum.
   Use proper risk management strategies like trailing stop-losses and avoid over-leveraging in volatile markets.
   Disclaimer:
   The above analysis is for educational purposes only. I am not a SEBI-registered analyst. Please perform your own research or consult a financial advisor before making any trading decisions. Markets involve risk; trade responsibly.