India50: Today's High Coincides with Equidistant Resistance Parallel To Resistance Line of Bullish Channel
The daily candle chart below shows the price history of India50 over the medium term. This Contract for Difference (CFD) aims to track the underlying price of the CNX Nifty broad market index in India, and is trading near 8888.5 around time of publication today and after the local market closed at a record high.
Last time this index was reviewed in the Ideas You Can Trade series, the overall trend was still bullish and the index had recovered quite well - in comparison to other major global market indexes in the last few quarters.
Today India50 closed near an all-time high for the 5th straight day as higher-highs followed the strong bullish trend that has pushed prices towards an upper resistance line parallel to the upper line of the bullish channel in the chart below.
This intraday high near 8935.0 could mark a reversal point- albeit a brief one - with a small pullback from here back to the upper resistance line of the channel (which could now act as support). Next stop if this upper resistance line is surpassed should be to test the 9,000 mark which could be a psychological level for traders to take profit - and/or for new buyers to enter.
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 8935.0 with a Limit to take profit @ 8999.0 and a stop-loss @ 8887.0 Risk/Reward Summary: Limit risk = +64.0 Profit / (-48.0) stop-loss risk = Gain to Loss ratio = 1.33
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 8849.0 with a Limit to take profit @ 8778.0 and a stop-loss @ 8919.0 Risk/Reward Summary: Limit risk = + 71.0 profit / (-70.0) Stop-loss risk = Gain to Loss Ratio = 1.01
Medium Term Daily Candle Chart:
Daily Candle Chart zoomed-out: