Negative opening and range bound trading expected today
As discussed yesterday, it proved to be a good opportunity to risk short selling. With today's expected negative opening, mostly due to global cues, this opportunity might seem to be worth holding on and carrying forward. However, the technicals need to confirm this. So let's get on with the technical analysis.
1) The Elder Ray readings : Bull Power increased by just 1 point from +150 to +151. Bear Power reduced from +65 to +75. This indicates that in spite of the short build up seen yesterday, the performance of the Bears is conspicuous by the absence of follow up selling.
2) The EMAs have now turned towards the positive, which is supportive to a bullish trend.
3) The stochastics are still in the overbought zone but are pointing downwards and seem ready to enter the neutral zone.
4) In the above chart, the MACD is rising. The volumes have fallen during yesterday's fall, indicating that the fall could be deceiving. The +ADX is falling. The -ADX is also falling.
5) Overall, given the global cues, the Nifty is likely to open in the negative. However, it will take an enormous effort from the Bears to keep it trading below the opening mark. The Bulls have enough power and technical support in the charts to assume that they will lift the Nifty from the negative opening.
6) As per the charts, the Nifty has a good support at 5000 to 5025 Zone and has a strong resistance at 5140 5170 Zone.
7) Considering the above, our trading plan for the day is,
a) We will open fresh longs around 5030 with a SL of 5010 and a target of 5120. We will add to these long positions only above 5185, with a target of 5320
b) We will open short positions near 5120 with a SL of 5165 and a target of 5040. We will add to short positions below 4990 with a target of 4920.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed yesterday, it proved to be a good opportunity to risk short selling. With today's expected negative opening, mostly due to global cues, this opportunity might seem to be worth holding on and carrying forward. However, the technicals need to confirm this. So let's get on with the technical analysis.
1) The Elder Ray readings : Bull Power increased by just 1 point from +150 to +151. Bear Power reduced from +65 to +75. This indicates that in spite of the short build up seen yesterday, the performance of the Bears is conspicuous by the absence of follow up selling.
2) The EMAs have now turned towards the positive, which is supportive to a bullish trend.
3) The stochastics are still in the overbought zone but are pointing downwards and seem ready to enter the neutral zone.
4) In the above chart, the MACD is rising. The volumes have fallen during yesterday's fall, indicating that the fall could be deceiving. The +ADX is falling. The -ADX is also falling.
5) Overall, given the global cues, the Nifty is likely to open in the negative. However, it will take an enormous effort from the Bears to keep it trading below the opening mark. The Bulls have enough power and technical support in the charts to assume that they will lift the Nifty from the negative opening.
6) As per the charts, the Nifty has a good support at 5000 to 5025 Zone and has a strong resistance at 5140 5170 Zone.
7) Considering the above, our trading plan for the day is,
a) We will open fresh longs around 5030 with a SL of 5010 and a target of 5120. We will add to these long positions only above 5185, with a target of 5320
b) We will open short positions near 5120 with a SL of 5165 and a target of 5040. We will add to short positions below 4990 with a target of 4920.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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