NIFTY : Trading levels and plan for 13-Dec-2024

Introduction

In the previous day's plan, we analyzed the Nifty 50 Index and identified key support and resistance levels. The chart highlighted a sideways trend in the yellow zone, a bullish trend in the green zone, and a bearish trend in the red zone. The actual price movement today followed the anticipated path, consolidating within the highlighted zones and providing opportunities for both long and short trades.

Trading Plan for 13-Dec-2024

Gap Up Opening (100+ points)

1. If Nifty opens with a gap up above 24,711.00, it is crucial to watch for a retest of the last and important resistance for intraday at 24,735.00. If the price sustains above this level, initiate long positions targeting 24,940.00.
   
   
2. Place a stop loss just below 24,711.00 to manage risk.
   
   
3. If the price fails to sustain above 24,735.00 and shows signs of reversal, consider short positions targeting the opening support/resistance zone at 24,484.00.
   
   
4. Monitor the price action closely and adjust stop losses to protect profits as the price moves in your favor.

Flat Opening

1. If Nifty opens flat around 24,539.50, observe the price action within the highlighted yellow zone.
   
   
2. A breakout and sustained movement above this range can pave the way for Nifty to target levels of 24,711.00 and 24,735.00.
   
   
3. Initiate long positions if the price breaks above the yellow zone with a stop loss just below the breakout level.
   
   
4. If the price remains within the yellow zone, avoid taking new positions and wait for a clear breakout or breakdown.
   
   
5. In case of a breakdown below the yellow zone, consider short positions targeting the support zone at 24,484.00.

Gap Down Opening (100+ points)

1. If Nifty opens with a gap down below 24,450.00, it is essential to watch for a retest of the opening support/resistance zone at 24,484.00.
   
   
2. If the price fails to reclaim this level and shows signs of further weakness, initiate short positions targeting the extended zone for Wave C correction at 24,354.00.
   
   
3. Place a stop loss just above 24,484.00 to manage risk.
   
   
4. If the price sustains above 24,484.00 after a gap down, consider long positions targeting the yellow zone and monitor for a potential reversal.
   
   
5. Adjust stop losses to protect profits as the price moves in your favor.

Risk Management Tips for Options Trading

1. Always use stop losses to limit potential losses.
   
   
2. Avoid over-leveraging and trade within your risk tolerance.
   
   
3. Diversify your trades to spread risk across different positions.
   
   
4. Keep an eye on implied volatility and time decay when trading options.
   
   
5. Regularly review and adjust your trading plan based on market conditions.

Summary and Conclusion

In summary, the trading plan for 13-Dec-2024 involves monitoring key support and resistance levels based on the opening scenario. For a gap-up opening, focus on sustaining above 24,735.00 for long positions. For a flat opening, watch for a breakout from the yellow zone. For a gap-down opening, monitor the 24,484.00 level for potential short positions. Implementing proper risk management strategies is crucial for successful options trading.

Disclaimer

I am not a SEBI registered analyst. The information provided is for educational purposes only and should not be considered as financial advice. Always conduct your own research and consult with a professional financial advisor before making any trading decisions.