We expect gap up open in the first case and gap down open in the second case. This is so because afternoon session is determined by Europe and Dow futures....so we expect the trend to continue the next day open barring some unexpected reversal in US markets in the evening.You will see that 70 % of the time the gap will be in direction of the late afternoon trend and the late afternoon trend is generally durable..
Smart_trade
Smart_trade
Dear ST
Let me briefly scribble my understanding here and tail them with a few queries.
1) First aspect of this theory is that we need trapped trader (bulls/bears)
2) That can happen only when there is a reversal esp all of a sudden , i.e trend reversal
3) And if turnaround is sharp and background is suitable like an important level is crossed then we can add positions or get in because on Break Out many will be getting in adding to the surge, which means the situation is compounded
4) Now if situation is not compounded we can go for 20+, if compounded we may get quick fire 30
5) Today at 2.55pm to 3pm there was difference of 35-40 points between VWAP and Nifty
6) When the market broke the high of 5158, there was new enthusiasm, and the market went off in the break out mode. The VWAP added, the squaring off added, closing of the positions on account of settlement added - to the bull run.
Questions
1) Would we carry Nifty knowing that it is at a premium of 50+ points
2) Do we check for Vwap only around last hour or is it equally effective in day time
3) Is there any other important point to note on an expiry day like today in case of rollover with this theory?
Thanx in Advance