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CFD: Ideas You Can Trade - India50 Uptick In Pullback, After Election

Posted by Steven Hatzakis on Feb 10, 2015 1:14:00 PM

India50: Small Uptick Amidst Pullback From 9,000 As Arvind Kejriwal's Aam Aadmi Party (AAP) Wins Election 

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 8616.0 around time of publication today and after the local market closed today in India.

Last month in Ideas You Can Trade, India50 was approaching the 9,000 mark and a bullish continuation was expected. After reaching slightly above that level - near its all time high - the index fell sharply and has been caught in a pullback in the last few weeks since. 

Today a small rebound followed the local election results in Delhi where Arvind Kejriwal's AAP party took nearly all the assembly seats in a landslide victory - thus shifting the political power of the government into AAP's hands.  

If today's signifies the bottom of the recent pullback then the bearish momentum should reverse, as the index is trading within the middle of the overall bullish channel (near the median line in yellow on chart below) which is a support area. If support fails near this median area of the channel then the bearish continuation should resume with support targeted on the lower line of the channel - near 8350.0 in the short term. 

Below are examples of how to trade a bullish continuation or a bearish reversal:

1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 8697.0 with a Limit to take profit @ 8800.0 and a stop-loss @ 8599.0 Risk/Reward Summary: Limit risk = +103.0 Profit / (-98.0) stop-loss risk = Gain to Loss ratio =  1.05

2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 8469.0 with a Limit to take profit @ 8379.0 and a stop-loss @ 8548.0 Risk/Reward Summary: Limit risk = + 90.0 profit / (-79.0) Stop-loss risk = Gain to Loss Ratio =  1.13

Medium Term Daily Candle Chart:

India50Daily February 10 2015 note

Topics: CFD trading, INR, National Stock Exchange, Nifty, Nifty 50, contract for difference, Indian, Rupiah, technical analysis, cfd, India, NSE, Nifty50, India50, Indian Rupiah


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