Today Nifty has broken out of range it has been trading for past one week. 5180 was a major resistance and today Nifty has breached this resistance and closed above it. Now another major resistance is at 5310; the recent high made by Nifty in January .
Now as a trader the question comes should one buy this breakout ? Well, most of the automated systems has given a screaming buy signal .But trades should also look at the trading environment . There is still lot of uncertainty at global front , rising inflation will result in higher interest rate regime. We have often experienced many failed breakout and one should trade them carefully and not become complacent.
There are two ways to trade this breakout - one should have gone long when Nifty broke out above 5158 the high of the range with low volume another way is to wait for retracement / pull back.Markets have tendency to pull back to 20-50 Dma . This will offer low risk entry as far as Index trading is concerned. It may so happen that sometimes market may not pull back quickly and may form another trading range at higher levels. That what trading is all about . Make your own rules and trade accordingly by judging the risk and trading environment.
Our another trading idea Polaris Software is achieved it first target.
Biocon Ltd has support at 266 and resistances are at 283 -298 If it is able to trade above 273 then it may retest the 298- 304.
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