Relief rally won't last much
As discussed yesterday, the volatile downtrend continued with the Nifty opening lower and closing in the red. However, during the later part of the trading sessions, Nifty showed signs of bounce back, which did not last above 4880. Today, given the global cues, Nifty is likely to open with a nice gap up. But will this be just a relief rally and not more? Million dollar question that. Let us analyze things on the technical front.
1) The Elder Ray readings : Bull Power reduced from -85 to -110 Bear Power increased from -185 to -231. This indicates Bears can puncture any rally at any time they choose.
2) The moving averages now continue to point downwards.
3) The Stochastics have now just entered the oversold zone, and a relief rally cannot be ruled out.
4) In the above chart, Nifty has taken support at the lower band of the Bollinger Bands, indicating some recovery. However, there is divergence in the MACD and the ADX which are prompting bearishness for the Nifty.
5) Considering all the above, we will have to be cautious about opening any long positions. However, if we do not cover our overnight short positions in time, we could be in for a shock at the end of the day. So we have to be careful on that front too.
6) FIIs have been nett sellers to the tune of 1300 crores yesterday.
7) Our trading plan for the day is to primarily act with caution and trade as little as possible and wait at least till mid session before taking any stance in the market. We may open fresh shorts around 4940 with a SL of 5010 and a target of 4800. We will refrain from opening fresh longs at least in the first 2 hours of the session.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed yesterday, the volatile downtrend continued with the Nifty opening lower and closing in the red. However, during the later part of the trading sessions, Nifty showed signs of bounce back, which did not last above 4880. Today, given the global cues, Nifty is likely to open with a nice gap up. But will this be just a relief rally and not more? Million dollar question that. Let us analyze things on the technical front.
1) The Elder Ray readings : Bull Power reduced from -85 to -110 Bear Power increased from -185 to -231. This indicates Bears can puncture any rally at any time they choose.
2) The moving averages now continue to point downwards.
3) The Stochastics have now just entered the oversold zone, and a relief rally cannot be ruled out.
4) In the above chart, Nifty has taken support at the lower band of the Bollinger Bands, indicating some recovery. However, there is divergence in the MACD and the ADX which are prompting bearishness for the Nifty.
5) Considering all the above, we will have to be cautious about opening any long positions. However, if we do not cover our overnight short positions in time, we could be in for a shock at the end of the day. So we have to be careful on that front too.
6) FIIs have been nett sellers to the tune of 1300 crores yesterday.
7) Our trading plan for the day is to primarily act with caution and trade as little as possible and wait at least till mid session before taking any stance in the market. We may open fresh shorts around 4940 with a SL of 5010 and a target of 4800. We will refrain from opening fresh longs at least in the first 2 hours of the session.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
No comments:
Post a Comment
Please add your comments here. Comments will be moderated.