With the Bulls failing to cross resistance at 5025, the expiry whipsaw is about to start.
As discussed yesterday, "The Bulls regain their footing", and as such the Nifty traded in the positive for almost the entire session. However, the Nifty closed below its opening mark, which is a signal of Bulls getting exhausted at some point. The Bears however, are yet to rise and strike. This, when added to the fact that yesterday was a NR7 day, makes up for a scenario, where the whipsaw may be unleashed.
1) The Elder Ray readings : Bull Power rises from +54 to +72 Bear Power reduces from -10 to +34, indicating that the Bears have now lost their footing and have to be quick to strike. For today, the Bulls need to surpass 5030 to maintain their upwards momentum, whereas the Bears need to breach 4950 to regain their lost grounds.
2) The Nifty is now poised above all its key EMAs, but is below its key DMAs.
3) The Stochastics are still in the neutral zone, very near to the overbought area.
Aided by short covering, the Bulls have staged a up move that can sustain.
Yesterday, we had suggested "Volatile expiry week ahead", and we saw hints of that volatility during the trading session yesterday, when the Nifty first struggled to cross the hurdles near 4970 and kept on coming back from there. However, the Bears could not breach the day low even once during the entire trading session, and that is where they lost the battle. The Bulls then took the Nifty past the resistance and closed it above at 4986. Today, again we could see a bout of volatility between 4950 and 5050 levels.
1) The Elder Ray readings : Bull Power increases from +2 to +54 Bear Power reduces from -45 to -10, indicating that now both the Bulls and the Bears are in their respective zones, and that could increase the volatility in the trade. For today, the Bulls need to overcome 5005 to maintain their rising momentum, whereas the Bears need to breach below 4940 to remain in their safe zone.
2) The Nifty is now above all its key EMAs but is below all its key DMAs.
3) The stochastics are in the neutral zone, and are pointing upwards. The fast stochastics are almost about to touch the overbought zone.
As the technicals point to a sideways market, the Nifty may see a volatile expiry.
On Friday, we had suggested "Choppiness to continue", and we saw the Nifty grinding within a very small trading range of 46 points between 4889 and 4936. Today, the Nifty is likely to open flat with a slightly negative bias, but is expected to again exhibit a choppy trading session with a slightly widened trading range.
1) The Elder Ray readings : Bull Power rises from -4 to +2 Bear Power reduces from -106 to -45, indicating that the Bears are now losing momentum at a high pace, but the Bulls are not able to capitalize at the same speed. For today, the Bulls need to overcome 4930 to remain in the positive zone, whereas the Bears need to breach the Nifty below 4885 to maintain their downwards momentum.
2) The Nifty continues to trade below its key DMAs and its 21 and 13 EMA, but above its 8EMA.
3) The Stochastics are now out of the oversold zone, and are pointing horizontal.
After a choppy week, the Bears still in control of the Nifty, at start of the expiry week.
During the past week, we had said, "Bearish hold still on" , and that the Nifty would go through "Grinding Consolidation", then there would be a "Retest of recent lows", and "Choppiness to continue" amidst a "Bias still downwards".
In our last weekly review, we had said "The weekly downturn has got arrested, but no signs of a rally yet. Pain continues. ".
The Nifty has obliged us with moving within its previous week's trading range. The Bulls and Bears both have failed to move the Nifty past the previous week's high and low, which were at 4957 and 4789. The current week's high and low were at 4956 and 4804.
As per the rules of "Identifying Market Trends", the Bears need to breach lows, or the Bulls need to overcome highs. A failure on part of both leads to what is called a "Sideways", "Range bound", "Consolidating" or a "Choppy" market. And haven't we got just that?
The trick of the trade in such markets is always to sell highs and buy lows, where the risk reward ratio is the most favorable. However, more important than that, is to "Trail your stop loss" to preserve profits, which enable multiple entries in the same direction. Also in choppy markets, it is advisable not to wait for targets. We followed these rules, and are happy we did so.
In a choppy market, the Nifty is trading at the top end of its short term range.
Yesterday, we had said, "The bias is still downward", however, after "the retest of recent lows" two days ago, the Bears seemed to get exhausted, and were not able to breach the previous days low. As per our rules of "identifying market trends", the bears needed to breach lows in order to keep the down trend intact. Their failure to do so, led the bulls to takeover the Nifty, and they staged a smart comeback. However, the Bulls have stopped just short of their recent highs near 4955, which could act as a resistance point for today. A failure by both the Bulls and the Bears would lead to an increase in choppiness on the Nifty.
1) The Elder Ray readings : Bull Power rises from -85 to -4 Bear Power reduces from -135 to -106, indicating that even after the smart pullback by the Bulls, the Bears are still in the drivers seat, albeit a lot weakened. For today, the Bulls need to overcome 4940, whereas the Bears need to breach 4830 to maintain their current momentum.
2) The Nifty is now trading below its key DMAs and its 13 and 21 EMAs, however, it is above its 8 EMA which is at 4900, which could be a key pivot point for the Nifty now.
3) The Stochastics are just out of the oversold zone, and are pointing upwards now.
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