Rally seems to be exhausting
The recent rally that started after a sharp drop of around 1000 points on Nifty to 4720 has now for the 3rd time tried to cross 5170 which till August had acted as a support and now seems to be an insurmountable resistance. Last week, both the Bulls and the Bears have been bruised badly and it seems that the Nifty will lose much of its volatility, which is much necessary for some sort of rally to continue.
1) The fresh Elder Ray readings : The Bull Power has increased from +68 to +112 and the Bear Power has dropped from -55 to +36 suggesting advantage for the Bulls. However, the BullBear ratio reads at 11:87 suggesting Bears not giving up so easily.
2) The simple moving averages will continue to drop, unless we have a good positive closing today. The 13 Ema is forming a lower top.
3) The bearish downtrend will confirm only if today's close is below 5040.
4) Last week, both the Bulls and Bears have failed to cross over their trading ranges.
5) In the above chart, the Bollinger Bands, the MACD and the ADX, all suggest that some rally is still potentially remaining. But this rally once tops out, could fizzle out fast.
6) Today's trading plan : We will wait patiently for a topping out to happen and the Nifty to trade consistently 40 points below its day high. Once that happens, we will open new shorts with a target of DH - 80 points and a SL of the day high. If that does not happen, it will be a clear indication of a continued bull run, and we will wait for 5170- 5220 to be crossed, where above 5220 we will go long for 5320 and a SL of 5170. We will observe a no trading zone till then.
Happy Trading
For cash market recommendations see our Daily Pre Market calls on NSE
The recent rally that started after a sharp drop of around 1000 points on Nifty to 4720 has now for the 3rd time tried to cross 5170 which till August had acted as a support and now seems to be an insurmountable resistance. Last week, both the Bulls and the Bears have been bruised badly and it seems that the Nifty will lose much of its volatility, which is much necessary for some sort of rally to continue.
1) The fresh Elder Ray readings : The Bull Power has increased from +68 to +112 and the Bear Power has dropped from -55 to +36 suggesting advantage for the Bulls. However, the BullBear ratio reads at 11:87 suggesting Bears not giving up so easily.
2) The simple moving averages will continue to drop, unless we have a good positive closing today. The 13 Ema is forming a lower top.
3) The bearish downtrend will confirm only if today's close is below 5040.
4) Last week, both the Bulls and Bears have failed to cross over their trading ranges.
5) In the above chart, the Bollinger Bands, the MACD and the ADX, all suggest that some rally is still potentially remaining. But this rally once tops out, could fizzle out fast.
6) Today's trading plan : We will wait patiently for a topping out to happen and the Nifty to trade consistently 40 points below its day high. Once that happens, we will open new shorts with a target of DH - 80 points and a SL of the day high. If that does not happen, it will be a clear indication of a continued bull run, and we will wait for 5170- 5220 to be crossed, where above 5220 we will go long for 5320 and a SL of 5170. We will observe a no trading zone till then.
Happy Trading
For cash market recommendations see our Daily Pre Market calls on NSE
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