NIFTY : Trading levels and Plan for 08-JAN-2025

Nifty Trading Plan for 08-Jan-2025

Intro: Review of 07-Jan-2025 Plan
Yesterday's trading plan accurately highlighted the Opening Resistance Zone (23,849-23,888), which acted as a cap for bullish momentum, and the Opening Support Zone (23,673-23,604), which provided a bounce. The market respected these levels with a predominantly sideways movement (Yellow Trend). The Best Buying Zone (23,251-23,362) remained untouched, keeping the downside potential intact.

For 08-Jan-2025, we focus on three opening scenarios: Gap-Up, Flat, or Gap-Down, with actionable strategies and clear risk management guidelines.

Opening Scenarios:

1. Gap-Up Opening (100+ points above previous close):
   If Nifty opens above 23,888, the Opening Resistance Zone (23,849-23,888) will likely act as a critical area.
   
   A breakout above 23,888 with volume could push Nifty toward the next resistance at 24,081. Go long on confirmed breakout candles with small retracements.
   A rejection near 23,888 could result in a pullback to test 23,673-23,604. Wait for reversal confirmation before entering short positions.
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   Risk Management Tip: Avoid aggressive CE buying after a large gap-up; instead, use intraday dip-buying strategies or spreads for better risk control.
   
2. Flat Opening (Near previous close):
   A flat opening around 23,694 could lead to a range-bound session (Yellow Trend). This scenario requires patience and precise execution:
   
   A bullish breakout above 23,849 could lead to upside momentum, targeting 23,888 and 24,081.
   On the downside, a breakdown below 23,604 could initiate bearish momentum, with targets at 23,483-23,518.
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   Risk Management Tip: Use option straddle strategies to benefit from potential sideways movements. Avoid overtrading in choppy market conditions.
   
3. Gap-Down Opening (100+ points below previous close):
   If Nifty opens below 23,604, focus on the Opening Support Zone (23,483-23,518) for potential reversals.
   
   A bounce from 23,483-23,518 can provide a buying opportunity, targeting 23,604 and above.
   A breakdown below 23,483 may trigger a bearish trend (Red Trend) toward the Best Buying Zone (23,251-23,362). Wait for proper confirmation before initiating short trades.
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   Risk Management Tip: For gap-down scenarios, use PE options or bear put spreads with defined risks. Be cautious of sharp reversals after a gap-down.
   

Key Levels to Watch:

Support Zones: 23,673-23,604, 23,483-23,518, and 23,251-23,362.
Resistance Zones: 23,849-23,888 and 24,081.
Summary & Conclusion:
Nifty is trading within a structured range, offering clear opportunities for intraday trades based on levels. Stick to disciplined execution, and do not chase trades without confirmation. Use options strategies to manage risk and maximize returns in volatile conditions.

Disclaimer: I am not a SEBI-registered analyst. This analysis is for educational purposes only. Please consult your financial advisor before making any trading decisions.