Nifty back in four digits: Top strategies traders should follow now

Traders on Dalal Street have been going short ever since the Nifty went below its 200-Day Moving Average (DMA) this week.

Friday's rout piled on more agony as it pulled the benchmark down by over 10 per cent to below 10,000 against its all-time high hit in January.

According to analysts, domestic equities are over-reacting to the global cues. But it's an opportune time for long-term investors to start nibbling or accumulating around these levels.


They believe that shorting at this point can burn a hole in traders' pocket.

Mustafa Nadeem, CEO, Epic Research said, “The four-digit numbers of 9,950-9,980 are crucial levels and at this point, if someone would go short then it may be a bit late.”

One should use the rallies or bounceback for shorting for lower levels. “Bounceback towards 200-DMA at 10,250 or 10,300 would be suitable to position size for next downward leg. One has to be stock specific in the near term and long-term investors should accumulate SIPs,” advised Nadeem.

The Nifty breached 10,000-mark on the downside on Friday for the first time since October 2017.

Mazhar Mohammad, Chief Strategist-Technical Research & Trading Advisory, Chartviewindia.in, said, “Traders are advised to exit underperforming scrips of their portfolio and should shift to outperformers by making use of this rally. Technically, we expect price-wise damage to end around 9,700 levels where as a close back above 10,000 may instil some confidence in bulls. Lacklustre moves with negative bias may extend up to the expiry day, which is just 3 sessions away.”