Nifty all set to nose dive and re-test the recent lows
As discussed in our last post, immediate major fall unlikely, the Nifty opened 60 points down at 5160 but never really looked like collapsing, and eventually closed at 5169. Today, given the global cues, the Nifty is likely to open with a positive gap. However, during the Friday's trade, the technicals have generated a fresh, clear and sustainable sell signal, which might lead the Nifty to nose dive and retest the recent lows.
1) The Elder Ray readings : Bull Power reduces from +98 to -14 Bear Power increases from -8 to -70. This is the first time since 5th Oct 2011, that the Bulls have actually come into the negative zone. Also simultaneously, the Bears have now entered into their own territory. This shows that the Bears have now a good grip on the Nifty.
2) The EMAs have now started pointing downwards. Also the 100 and 200 DMAs are pointing downwards. Indications of a sell off clearly written on the wall.
3) The stochastics are right in the middle, but are pointing downwards, yet another sell signal.
4) In the above chart, the volumes have increased in the last two sessions with a falling nifty. The MACD has also generated a fresh sell signal. The ADX has also given out a fresh sell signal.
5) During the recent past, we have never witnessed so many pin pointed directional signals from multiple technical indicators simultaneously. The markets are noted for defying technical signals for a initial small period of time. We need to safeguard ourselves from such deceiving moves.
6) Based on the above, we have devised our trading plan for the day as under,
a) Around 5230, we will open fresh short positions with a SL of 5250 and a target of 5140. We will add to these short positions only below 5100.
b) We will be wary of opening any long positions for the day, and wait patiently for the technicals to re-confirm their sell signals. However, we may open a long position only above 5260, for a quick in and out type of trade.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed in our last post, immediate major fall unlikely, the Nifty opened 60 points down at 5160 but never really looked like collapsing, and eventually closed at 5169. Today, given the global cues, the Nifty is likely to open with a positive gap. However, during the Friday's trade, the technicals have generated a fresh, clear and sustainable sell signal, which might lead the Nifty to nose dive and retest the recent lows.
1) The Elder Ray readings : Bull Power reduces from +98 to -14 Bear Power increases from -8 to -70. This is the first time since 5th Oct 2011, that the Bulls have actually come into the negative zone. Also simultaneously, the Bears have now entered into their own territory. This shows that the Bears have now a good grip on the Nifty.
2) The EMAs have now started pointing downwards. Also the 100 and 200 DMAs are pointing downwards. Indications of a sell off clearly written on the wall.
3) The stochastics are right in the middle, but are pointing downwards, yet another sell signal.
4) In the above chart, the volumes have increased in the last two sessions with a falling nifty. The MACD has also generated a fresh sell signal. The ADX has also given out a fresh sell signal.
5) During the recent past, we have never witnessed so many pin pointed directional signals from multiple technical indicators simultaneously. The markets are noted for defying technical signals for a initial small period of time. We need to safeguard ourselves from such deceiving moves.
6) Based on the above, we have devised our trading plan for the day as under,
a) Around 5230, we will open fresh short positions with a SL of 5250 and a target of 5140. We will add to these short positions only below 5100.
b) We will be wary of opening any long positions for the day, and wait patiently for the technicals to re-confirm their sell signals. However, we may open a long position only above 5260, for a quick in and out type of trade.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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