Nifty is nearing key support levels, but Bears not ready to loosen their stranglehold.
On Friday, we had said "RBI monetary policy may stoke volatility in a already falling market." and that is what was seen in the markets, with the Nifty traversing through 3 cents 4800 4700 and 4600, before closing at 4652. Today, given the global cues, Nifty is likely to open with a negative bias, but the double bottom formation, could lead to a relief rally.
1) The Elder Ray readings : Bull Power increases from -89 to -10 Bear Power also increases from -184 to -200. This indicates, that all the effort of Bulls on Friday, has not been able to recover lost grounds for them and that the Bears in one swift action have struck them down. However, this also indicates that the rate of increase in strength of the Bears has gone down, in turn which indicates that the fall from here might be limited for the time being.
2) The EMAs and the DMAs continue to point downwards indicating weakness in the Nifty.
3) The fast stochastics are well in the oversold zone, however, the slow stochastics are just hovering on the border line, indicating that there is still some room for the fall to continue.
4) In the above chart, the MACD histogram is in the negative and falling. Indicating that there should be caution in further selling and that the Buy signal is yet some distance away. The ADX also is indicating a slowing down of the fall ahead and a strengthening of buying action in coming sessions. However, the ADX has not yet given out any fresh buy signal as yet.
5) Based on the above, our trading plan for the day is as under.
a) Above 4580, we will open fresh long positions with a SL of 4555 and a target of 4680. We will add to these long positions only above 4720.
b) Below 4700, we will open fresh short positions with a SL of 4715 and a target of 4590. We will add to these short positions only below 4550.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
On Friday, we had said "RBI monetary policy may stoke volatility in a already falling market." and that is what was seen in the markets, with the Nifty traversing through 3 cents 4800 4700 and 4600, before closing at 4652. Today, given the global cues, Nifty is likely to open with a negative bias, but the double bottom formation, could lead to a relief rally.
1) The Elder Ray readings : Bull Power increases from -89 to -10 Bear Power also increases from -184 to -200. This indicates, that all the effort of Bulls on Friday, has not been able to recover lost grounds for them and that the Bears in one swift action have struck them down. However, this also indicates that the rate of increase in strength of the Bears has gone down, in turn which indicates that the fall from here might be limited for the time being.
2) The EMAs and the DMAs continue to point downwards indicating weakness in the Nifty.
3) The fast stochastics are well in the oversold zone, however, the slow stochastics are just hovering on the border line, indicating that there is still some room for the fall to continue.
4) In the above chart, the MACD histogram is in the negative and falling. Indicating that there should be caution in further selling and that the Buy signal is yet some distance away. The ADX also is indicating a slowing down of the fall ahead and a strengthening of buying action in coming sessions. However, the ADX has not yet given out any fresh buy signal as yet.
5) Based on the above, our trading plan for the day is as under.
a) Above 4580, we will open fresh long positions with a SL of 4555 and a target of 4680. We will add to these long positions only above 4720.
b) Below 4700, we will open fresh short positions with a SL of 4715 and a target of 4590. We will add to these short positions only below 4550.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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