Stock picks of the day: Investors should adopt a ‘sell on rise’ strategy while trading Nifty

In the past, we believed that the Nifty50 is likely to remain in the range of 10,740–11,100, and a move on either side would dictate the trend in the near term.

In line with the forecast, the index took a U-turn from 11,084 on Friday, 13 September 2019, and from there, we witnessed relentless selling in the index which pushed Nifty below the support placed at 10,740.

Technically, we are witnessing a breakdown on the daily chart, which resembles a ‘symmetrical triangle’ formation. The theoretical target for the same is around 10,500.

Thus, for the time being, we have a ‘sell on rise’ view for the markets, and the pattern would be negated if the index closes above 10,885 levels.

Hence, till that time, traders are advised to avoid aggressive long bets. Going ahead, there is a fair chance of markets attracting buying interest near the aforementioned mark 10,500, because in the past the zone of 10,800–10,500 was a demand zone for the Nifty.

The index oscillated in this range from December 2018 to March 2019 before starting a fresh rally towards an all-time high. Thus, we are hopeful of history repeating itself and the pessimism to cool down after this fall.