Watch out for 5170 5220 range
In our post two day's ago, we said use the gap down as an opportunity to go long. That strategy is now yielding good results, as the Nifty seems to be ready to cross the wall of worry that stands in the range of 5170 to 5220. Having said that, the Nifty has in the past few weeks, failed to cross this wall and has gone back to test its recent lows at least 4 times. If it fails now again, then the lower boundary of the current trading range is in real threat. However, if the Nifty succeeds in taking out 5220, then we can see a 200 point rally in the coming sessions. A close technical analysis will throw more light on this.
1) Given the global cues, the Nifty is likely to have a subdued opening.
2) The Elder Ray readings : Bull Power increased from +44 to +117 Bear Power reduced from -2 to +44. The bears have again come in the positive territory, making them weak. However, the falling volumes indicate that the bears have been sitting on the ring side, and that is why the bulls have had their way in the market.
3) The EMAs are pointing up and the DMAs are pointing down, indicating a uptrend within a major downtrend. This is a clear indication that a trend reversal is yet to be confirmed.
4) The stochastics are deep in the overbought zone, and indicate that a buying frenzy has happened. So we need to watch out for a selling spree to start.
5) In the above chart, both the MACD and the ADX are supportive of the bullish trend. However, the Bollinger Bands are signalling a halt near 5200.
6) Considering all of the above, our trading plan for the day is based on the thesis that the Nifty has a support at 5090 and a resistance at 5220.
a) We will open fresh long positions near 5110 with a SL of 5080 and a target of 5180. We will add to our long positions only above 5230.
b) We will open fresh short positions near 5200 with a SL of 5230 and a target of 5100. We will add to our short positions only below 5075.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
In our post two day's ago, we said use the gap down as an opportunity to go long. That strategy is now yielding good results, as the Nifty seems to be ready to cross the wall of worry that stands in the range of 5170 to 5220. Having said that, the Nifty has in the past few weeks, failed to cross this wall and has gone back to test its recent lows at least 4 times. If it fails now again, then the lower boundary of the current trading range is in real threat. However, if the Nifty succeeds in taking out 5220, then we can see a 200 point rally in the coming sessions. A close technical analysis will throw more light on this.
1) Given the global cues, the Nifty is likely to have a subdued opening.
2) The Elder Ray readings : Bull Power increased from +44 to +117 Bear Power reduced from -2 to +44. The bears have again come in the positive territory, making them weak. However, the falling volumes indicate that the bears have been sitting on the ring side, and that is why the bulls have had their way in the market.
3) The EMAs are pointing up and the DMAs are pointing down, indicating a uptrend within a major downtrend. This is a clear indication that a trend reversal is yet to be confirmed.
4) The stochastics are deep in the overbought zone, and indicate that a buying frenzy has happened. So we need to watch out for a selling spree to start.
5) In the above chart, both the MACD and the ADX are supportive of the bullish trend. However, the Bollinger Bands are signalling a halt near 5200.
6) Considering all of the above, our trading plan for the day is based on the thesis that the Nifty has a support at 5090 and a resistance at 5220.
a) We will open fresh long positions near 5110 with a SL of 5080 and a target of 5180. We will add to our long positions only above 5230.
b) We will open fresh short positions near 5200 with a SL of 5230 and a target of 5100. We will add to our short positions only below 5075.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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