Why Nifty Around 5600 is in No Trade Zone?

I don’t prefer trading around the strong pivot points but use pivot points as point of reference for defining support, resistance and stop loss.

Wanna Invest in the Right Stock at the Right Price?

Did you miss a great investment opportunity recently? Not anymore.
My book helps Indian retail Investors make right investment decisions.

Buy now from Amazon

I don’t prefer trading around the strong pivot points but use pivot points as point of reference for defining support, resistance and stop loss. In Nifty I see a strong pivot point around 5600 and I would like to see Nifty going away from 5600 either on the upside or downside and for me to open position in Nifty.

On June 17th when I looked at Nifty charts I knew 5600 is a long term resistance for Nifty.

As of today June 30th 2011 after 2 days of good up swing from 5500 to 5600, today Nifty again consolidated around 5600 levels with low of 5605 and this is actually a no trade zone for me as of now. Nifty is in a short term down trend. See the charts below.

I prefer trading along the trend and so if Nifty cracks 5600 decisively I would go short in Nifty with recent peak as my stop loss but for long position I would ideally like to see Nifty take out the previous peak but I don’t expect that to happen any time soon.

What are your views of the market?

Charts by Yahoo Finance