Can the Bears keep the Nifty down ?
The Nifty is most likely to open with a Gap Down, given the global market cues on Friday. That makes for a classic bearish case with a stop at the previous day's end of 5050 levels, and a target of 4950 where the next support lies for the Nifty. Having said that, let us examine the previous day's end values a bit more closely.
1) As per the Elder Ray readings, the Bull Power has decreased from +132 to +124 whereas the Bear Power has increased from +61 to +7 ( The lower the value the more the Bear Power), this indicates that the recent bullish honeymoon is getting over and the Bears are looking to gaining control. As per the author & founder of the Elder Ray, the best time to look out for opening shorts is when Bull Power is positive but falling.
2) The ATR is decreasing gradually but consistently, indicating of consolidation in forthcoming sessions. As for now, 5170 seems to be a established short term top. So the consolidation zone can be defined between 4950 and 5150, a 200 point range that is approximately twice the current ATR.
3) In the above chart, ADX has given a signal to cover your longs, and wait for another signal. The MACD is still pointing a upward bias, strengthening our opinion of some consolidation in the offing over the next few sessions.
4) The Nifty futures are trading at a hefty discount of over 15 Rs. suggesting a bearish breakdown after consolidation.
5) Our view for Monday 12th Sept 2001 is to look out for going short below Friday's close of 5050 with a target of 4970 / 4950 and a SL of 5070. However, our view would change only and only if the Bulls are able to take the Nifty past 5080 when we will cover our shorts and go long for a target of 5120 / 5140 with a SL of 5045. The art will lie in having patience to wait till a proper risk to reward ratio trade comes on the scene, and many traders who will not be patient enough will get dragged in a wrong or a less rewarding risky trade. We hope we are not one of them tomorrow.
Happy Trading
For cash market recommendations see our Daily Pre Market calls on NSE
The Nifty is most likely to open with a Gap Down, given the global market cues on Friday. That makes for a classic bearish case with a stop at the previous day's end of 5050 levels, and a target of 4950 where the next support lies for the Nifty. Having said that, let us examine the previous day's end values a bit more closely.
1) As per the Elder Ray readings, the Bull Power has decreased from +132 to +124 whereas the Bear Power has increased from +61 to +7 ( The lower the value the more the Bear Power), this indicates that the recent bullish honeymoon is getting over and the Bears are looking to gaining control. As per the author & founder of the Elder Ray, the best time to look out for opening shorts is when Bull Power is positive but falling.
2) The ATR is decreasing gradually but consistently, indicating of consolidation in forthcoming sessions. As for now, 5170 seems to be a established short term top. So the consolidation zone can be defined between 4950 and 5150, a 200 point range that is approximately twice the current ATR.
3) In the above chart, ADX has given a signal to cover your longs, and wait for another signal. The MACD is still pointing a upward bias, strengthening our opinion of some consolidation in the offing over the next few sessions.
4) The Nifty futures are trading at a hefty discount of over 15 Rs. suggesting a bearish breakdown after consolidation.
5) Our view for Monday 12th Sept 2001 is to look out for going short below Friday's close of 5050 with a target of 4970 / 4950 and a SL of 5070. However, our view would change only and only if the Bulls are able to take the Nifty past 5080 when we will cover our shorts and go long for a target of 5120 / 5140 with a SL of 5045. The art will lie in having patience to wait till a proper risk to reward ratio trade comes on the scene, and many traders who will not be patient enough will get dragged in a wrong or a less rewarding risky trade. We hope we are not one of them tomorrow.
Happy Trading
For cash market recommendations see our Daily Pre Market calls on NSE
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