Range bound Nifty with depleting volumes needs to be traded cautiously.
As discussed yesterday, the downtrend in the Nifty continued, and the Nifty took support just below our indicated levels and found resistance at our indicated levels too. The Nifty traded between 5205 and 5300 before closing at 5258 which was our first resistance as indicated yesterday. For today, again the same range will act important supports and resistances.
1) The Elder Ray readings : Bull Power reduces from +140 to +117 Bear Power increases from +68 to +22, indicating that the Bulls are losing their grip on the Nifty and that the Bears are continuing to gain strength. However, the Bears need that extra effort to come into their negative zone.
2) The EMAs continue to point upwards and are supportive of an up-trend. The 50 DMA also is indicating of a up move but the 100 and 200 DMAs are pointing downwards. This reinforces our belief in a range bound trade in the coming sessions.
3) The stochastics have moved out of the overbought zone and are pointing downwards. However, they are still far from the oversold zone, indicating that the upside to this move may be capped.
4) In the above chart, the MACD is pointing upwards, the Bollinger Bands are expanding, indicating a positive bias. However, the ADX is showing that the up-move is losing momentum and the down trend is gaining strength.
5) We still believe that neither the Bulls nor Bears are going to give up so easily, and that the Nifty will still find support at 5210 5175 zone and also it will find resistance near 5320.
6) Based on the above, our trading plan for the day is as under
a) Around 5310 we will open short positions with a SL of 5320 and a target of 5210. We will add to these short positions only below 5180.
b) Around 5200 we will open long positions with a SL of 5170 and a target of 5300. We will add to these long positions only above 5350.
c) We will trail our stop loss in the direction of profits as the moves can be wildly volatile, and the markets can provide multiple entries at the same levels during the day.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed yesterday, the downtrend in the Nifty continued, and the Nifty took support just below our indicated levels and found resistance at our indicated levels too. The Nifty traded between 5205 and 5300 before closing at 5258 which was our first resistance as indicated yesterday. For today, again the same range will act important supports and resistances.
1) The Elder Ray readings : Bull Power reduces from +140 to +117 Bear Power increases from +68 to +22, indicating that the Bulls are losing their grip on the Nifty and that the Bears are continuing to gain strength. However, the Bears need that extra effort to come into their negative zone.
2) The EMAs continue to point upwards and are supportive of an up-trend. The 50 DMA also is indicating of a up move but the 100 and 200 DMAs are pointing downwards. This reinforces our belief in a range bound trade in the coming sessions.
3) The stochastics have moved out of the overbought zone and are pointing downwards. However, they are still far from the oversold zone, indicating that the upside to this move may be capped.
4) In the above chart, the MACD is pointing upwards, the Bollinger Bands are expanding, indicating a positive bias. However, the ADX is showing that the up-move is losing momentum and the down trend is gaining strength.
5) We still believe that neither the Bulls nor Bears are going to give up so easily, and that the Nifty will still find support at 5210 5175 zone and also it will find resistance near 5320.
6) Based on the above, our trading plan for the day is as under
a) Around 5310 we will open short positions with a SL of 5320 and a target of 5210. We will add to these short positions only below 5180.
b) Around 5200 we will open long positions with a SL of 5170 and a target of 5300. We will add to these long positions only above 5350.
c) We will trail our stop loss in the direction of profits as the moves can be wildly volatile, and the markets can provide multiple entries at the same levels during the day.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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