Nifty may see a shortcovering bout. But selling pressure would resume soon.
As discussed yesterday, the whipsaw prior to expiry has started. The downtrend in the Nifty may now see some increase in volatility amidst short covering rallies prior to expiry. However, the overall trend still remains downwards and the technicals are still refusing to indicate any trend reversal.
1) The Elder Ray readings : Bull Power rises from -182 to -178 Bear Power rises from -260 to -287. This suggests that the Bulls have started regrouping, but the Bears are not relenting and have increased their pressure.
2) The EMAs and the DMAs are now all pointing downwards.
3) The stochastics are now in the oversold zone since last 5 trading sessions, indicating that a relief rally is well on the cards.
4) In the above chart, the MACD and the ADX are both indicating a downward movement on the Nifty. However, the ADX is showing slowing down of the momentum temporarily.
5) Considering the above, we have devised our trading plan for the day as under.
a) Around 4835, we will open fresh short positions with a SL of 4865 and a target of 4740. We will add to these short positions only below 4710.
b) Around 4730, we will open fresh long positions with a SL of 4715 and a target of 4825. We will add to these long positions only above 4860.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed yesterday, the whipsaw prior to expiry has started. The downtrend in the Nifty may now see some increase in volatility amidst short covering rallies prior to expiry. However, the overall trend still remains downwards and the technicals are still refusing to indicate any trend reversal.
1) The Elder Ray readings : Bull Power rises from -182 to -178 Bear Power rises from -260 to -287. This suggests that the Bulls have started regrouping, but the Bears are not relenting and have increased their pressure.
2) The EMAs and the DMAs are now all pointing downwards.
3) The stochastics are now in the oversold zone since last 5 trading sessions, indicating that a relief rally is well on the cards.
4) In the above chart, the MACD and the ADX are both indicating a downward movement on the Nifty. However, the ADX is showing slowing down of the momentum temporarily.
5) Considering the above, we have devised our trading plan for the day as under.
a) Around 4835, we will open fresh short positions with a SL of 4865 and a target of 4740. We will add to these short positions only below 4710.
b) Around 4730, we will open fresh long positions with a SL of 4715 and a target of 4825. We will add to these long positions only above 4860.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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