5170 a key level on the Nifty
As discussed in our last two posts, the Bulls have been on the roll, and the positive bias continued during the entire trading session yesterday. The Nifty, once it traded above the key resistance of 5040, shot up and ended at 5099 after showing a day high of 5110. Now, one has to watch out how the Nifty reacts to 5170 which has been a key resistance point during the past few weeks. It is interesting to note, that the same level of 5170 had been a key support to the Nifty since June 2010 till Aug 2011. Will this level be taken out easily? No easy answers to that one.
1) The Elder Ray readings : Bull Power rises from +121 to +161 Bear Power loses from +40 to +48. This is the maximum reading for the Bulls since 1st July 2011. It is also interesting to note that the current fall in the Nifty started 5 sessions since that day. The Bears seem to be taking a pause and regrouping, by not losing much ground on the Bear Power.
2) The simple moving averages continue to point downwards, but the important exponential moving averages have started to point upwards. The Nifty yesterday closed above its 50DMA for the first time since 27th July 2011. This is a positive for the uptrend to continue, and 5035 the current 50DMA could be used as a good SL ( on closing basis ) for any long positions initiated now.
3) The fast stochastics have already entered the overbought zone and the slow stochastics are following very closely, indicating that a near term top may be just around the corner, before prices start dropping.
4) In the above chart, the MACD is about to form a double top, which is a caution for the bullish trend. The upper band of the Bollinger is opening up slightly, indicating volatility at the top levels.
5) Overall, the Bulls seem to be overexcited and the Bears are just watching the fun and regrouping.
6) Our trading plan for the day is based on 5170 as key resistance and 5035 as a key support. So,
a) We will open long positions near 5060, with a SL of 5025 and a target of 5160. We will add to long positions only above 5190 with a fresh target of 5250 and 5320.
b) Near 5160 we will open fresh short positions with a SL of 5190 and a target of 5050. We will add to short positions only below 5020 with a fresh target of 4960 and 4920.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed in our last two posts, the Bulls have been on the roll, and the positive bias continued during the entire trading session yesterday. The Nifty, once it traded above the key resistance of 5040, shot up and ended at 5099 after showing a day high of 5110. Now, one has to watch out how the Nifty reacts to 5170 which has been a key resistance point during the past few weeks. It is interesting to note, that the same level of 5170 had been a key support to the Nifty since June 2010 till Aug 2011. Will this level be taken out easily? No easy answers to that one.
1) The Elder Ray readings : Bull Power rises from +121 to +161 Bear Power loses from +40 to +48. This is the maximum reading for the Bulls since 1st July 2011. It is also interesting to note that the current fall in the Nifty started 5 sessions since that day. The Bears seem to be taking a pause and regrouping, by not losing much ground on the Bear Power.
2) The simple moving averages continue to point downwards, but the important exponential moving averages have started to point upwards. The Nifty yesterday closed above its 50DMA for the first time since 27th July 2011. This is a positive for the uptrend to continue, and 5035 the current 50DMA could be used as a good SL ( on closing basis ) for any long positions initiated now.
3) The fast stochastics have already entered the overbought zone and the slow stochastics are following very closely, indicating that a near term top may be just around the corner, before prices start dropping.
4) In the above chart, the MACD is about to form a double top, which is a caution for the bullish trend. The upper band of the Bollinger is opening up slightly, indicating volatility at the top levels.
5) Overall, the Bulls seem to be overexcited and the Bears are just watching the fun and regrouping.
6) Our trading plan for the day is based on 5170 as key resistance and 5035 as a key support. So,
a) We will open long positions near 5060, with a SL of 5025 and a target of 5160. We will add to long positions only above 5190 with a fresh target of 5250 and 5320.
b) Near 5160 we will open fresh short positions with a SL of 5190 and a target of 5050. We will add to short positions only below 5020 with a fresh target of 4960 and 4920.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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