Nifty dangerously close to near term resistance
As discussed on Friday, the Bulls demonstrated their control over the Nifty, but could not take it past the near term resistance of 5170 and were forced to shut shop at 5132 with a gain of 54 points over the previous close. Today, we are likely to have a positive to flat opening, and Nifty could struggle a bit at levels near to 5200. A closer technical review will clarify this.
1) The Elder Ray readings : Bull Power reduced from +169 to +150. Bear Power increased from +100 to +65. This indicates, that the Bulls have started slipping, and the Bears seem to have completed regrouping. The follow-up by either of them will produce the winner for the near term.
2) The DMAs are still pointing downwards, confirming the overall bearish trend. However, the EMAs have started to take an upward turn, indicating that a turnaround may be on the cards, yet to be confirmed.
3) The stochastics are deep into the overbought zone, and indicate that a near term top might just be around the corner.
4) In the above chart, the volumes are showing a divergence, with lower volumes during a bullish closing. Also there is a indication of an aborted bullish engulfing. However, the MACD is showing an up-move and the ADX does not indicate a bear run as yet.
5) As discussed in our weekly review yesterday, this is the best chance for the Nifty to cross the hurdle of 5170 5200. But if this chance is missed, we might see the recent lows again.
6) This makes for a good risk to reward ratio in opening short positions at around 5200 with a SL of 5240 and a target of 5025. Based on this our trading plan for today is as under.
a) Around 5200 we will open fresh shorts with a SL of 5240 and targets of 5100 5070 5025.
b) Around 5100 we will open fresh longs with a SL of 5060 and targets of 5200 5320.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed on Friday, the Bulls demonstrated their control over the Nifty, but could not take it past the near term resistance of 5170 and were forced to shut shop at 5132 with a gain of 54 points over the previous close. Today, we are likely to have a positive to flat opening, and Nifty could struggle a bit at levels near to 5200. A closer technical review will clarify this.
1) The Elder Ray readings : Bull Power reduced from +169 to +150. Bear Power increased from +100 to +65. This indicates, that the Bulls have started slipping, and the Bears seem to have completed regrouping. The follow-up by either of them will produce the winner for the near term.
2) The DMAs are still pointing downwards, confirming the overall bearish trend. However, the EMAs have started to take an upward turn, indicating that a turnaround may be on the cards, yet to be confirmed.
3) The stochastics are deep into the overbought zone, and indicate that a near term top might just be around the corner.
4) In the above chart, the volumes are showing a divergence, with lower volumes during a bullish closing. Also there is a indication of an aborted bullish engulfing. However, the MACD is showing an up-move and the ADX does not indicate a bear run as yet.
5) As discussed in our weekly review yesterday, this is the best chance for the Nifty to cross the hurdle of 5170 5200. But if this chance is missed, we might see the recent lows again.
6) This makes for a good risk to reward ratio in opening short positions at around 5200 with a SL of 5240 and a target of 5025. Based on this our trading plan for today is as under.
a) Around 5200 we will open fresh shorts with a SL of 5240 and targets of 5100 5070 5025.
b) Around 5100 we will open fresh longs with a SL of 5060 and targets of 5200 5320.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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