Nifty may try a bounce back today. As discussed in our last post, the Nifty traded in a narrow range for major part of the trading session on Wednesday, before the bearishness crept in and took it straight to 5212 where it found some support, before closing at 5221. Today, given the global cues, the Nifty is likely to have a subdued opening, but may attract some buying at lower levels. Although, this buying may not be aggressive enough to make a skyrocketing rise, it could be strong enough to prevent any vertical fall in the Nifty.1) The Elder Ray readings : The Bull Power rises from +85 to +98, the Bear Power also rises from +33 to -7. This indicates that although the Bears have regained their lost territory, the Bulls have also not given up yet. In such a tug of war, either the Nifty can trade in a dull range, or the volatility may shoot to the sky. Traders need to be prepared for either case.2) The near term EMAs have started turning downwards, however the 50 DMA is still pointing upwards.3) The stochastics have started falling, but are far from the oversold zone, indicating there is still some more room for a fall in the Nifty in the near future.4) In the above chart, the EMAs are stacked up positively, and suggest that the current fall in just a pull back that should be used to look out for buying opportunities. The volumes in the current fall have risen and are supportive of a further fall. The MACD histogram is falling, and the MACD is touching overbought levels. The ADX is suggesting indecision in both the up-move and the down-move.5) Given the global cues, the Nifty is likely to have a subdued opening. There is this level of 5175 which had acted as support over past few years, and had acted as resistance for the past few months. This could turn out to be a major support now.6) Based upon this our trading plan is as under,a) Around 5175 we will open long positions, with a SL of 5145 and a target of 5250. We will add to these long positions only above 5275.b) Around 5235 we will open short positions, with a SL of 5255 and a target of 5180. We will add to these short positions only below 5130.Happy Trading !!! For cash market recommendations see our Daily Pre Market calls on NSE
Nifty may try a bounce back today.
As discussed in our last post, the Nifty traded in a narrow range for major part of the trading session on Wednesday, before the bearishness crept in and took it straight to 5212 where it found some support, before closing at 5221. Today, given the global cues, the Nifty is likely to have a subdued opening, but may attract some buying at lower levels. Although, this buying may not be aggressive enough to make a skyrocketing rise, it could be strong enough to prevent any vertical fall in the Nifty.
1) The Elder Ray readings : The Bull Power rises from +85 to +98, the Bear Power also rises from +33 to -7. This indicates that although the Bears have regained their lost territory, the Bulls have also not given up yet. In such a tug of war, either the Nifty can trade in a dull range, or the volatility may shoot to the sky. Traders need to be prepared for either case.
2) The near term EMAs have started turning downwards, however the 50 DMA is still pointing upwards.
3) The stochastics have started falling, but are far from the oversold zone, indicating there is still some more room for a fall in the Nifty in the near future.
4) In the above chart, the EMAs are stacked up positively, and suggest that the current fall in just a pull back that should be used to look out for buying opportunities. The volumes in the current fall have risen and are supportive of a further fall. The MACD histogram is falling, and the MACD is touching overbought levels. The ADX is suggesting indecision in both the up-move and the down-move.
5) Given the global cues, the Nifty is likely to have a subdued opening. There is this level of 5175 which had acted as support over past few years, and had acted as resistance for the past few months. This could turn out to be a major support now.
6) Based upon this our trading plan is as under,
a) Around 5175 we will open long positions, with a SL of 5145 and a target of 5250. We will add to these long positions only above 5275.
b) Around 5235 we will open short positions, with a SL of 5255 and a target of 5180. We will add to these short positions only below 5130.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
Markets will be range bound for a while now As discussed yesterday, there was a repeat performance on the Nifty with the markets trading well within the range established on Friday. Today, given the positive global cues, the Nifty is likely to open with a positive gap. But, yet again, will this positive opening be sustained? or will the Bears try their strength? A bit of technical analysis will offer some clarity.1) The Elder Ray readings : Bull Power reduces from +119 to +85 Bear Power rises from +49 to +33. This is suggesting that the Bears are gaining power but are yet in the positive zone. However, the Bulls are losing steam and a follow up buying is required for them to show some strength. First indication of range bound movements, with a slight negative bias.2) The EMAs continue to point upwards, however the 100 and 200 DMAs are still pointing downwards, indicating weakness at higher levels in the Nifty.3) The stochastics are in the neutral zone, but are perilously close to the overbought zone. Again indicating that there is some head room for the Nifty to move upwards.4) In the above chart, the volumes have been on the decline, indicating lack of participation. The MACD is rising but the histogram is falling. The Bollinger bands are contracting slowly. The ADX is showing lack of strength in both the up and the down trends. The Nifty has formed a doji in the supply zone.5) Based upon above observations, it would be prudent for us to take positions hoping that the Nifty would trade in a tight range of about 100 points with 5350 as a resistance and 5250 as a support.6) Our trading plan for the day thus, is as undera) Around 5340 we will open short positions with a SL of 5360 and a target of 5260. We will add to these short positions only below 5210.b) Around 5250 we will open long positions with a SL of 5225 and a target of 5320. We will add to these long positions only above 5380.Happy Trading !!! For cash market recommendations see our Daily Pre Market calls on NSE
Markets will be range bound for a while now
As discussed yesterday, there was a repeat performance on the Nifty with the markets trading well within the range established on Friday. Today, given the positive global cues, the Nifty is likely to open with a positive gap. But, yet again, will this positive opening be sustained? or will the Bears try their strength? A bit of technical analysis will offer some clarity.
1) The Elder Ray readings : Bull Power reduces from +119 to +85 Bear Power rises from +49 to +33. This is suggesting that the Bears are gaining power but are yet in the positive zone. However, the Bulls are losing steam and a follow up buying is required for them to show some strength. First indication of range bound movements, with a slight negative bias.
2) The EMAs continue to point upwards, however the 100 and 200 DMAs are still pointing downwards, indicating weakness at higher levels in the Nifty.
3) The stochastics are in the neutral zone, but are perilously close to the overbought zone. Again indicating that there is some head room for the Nifty to move upwards.
4) In the above chart, the volumes have been on the decline, indicating lack of participation. The MACD is rising but the histogram is falling. The Bollinger bands are contracting slowly. The ADX is showing lack of strength in both the up and the down trends. The Nifty has formed a doji in the supply zone.
5) Based upon above observations, it would be prudent for us to take positions hoping that the Nifty would trade in a tight range of about 100 points with 5350 as a resistance and 5250 as a support.
6) Our trading plan for the day thus, is as under
a) Around 5340 we will open short positions with a SL of 5360 and a target of 5260. We will add to these short positions only below 5210.
b) Around 5250 we will open long positions with a SL of 5225 and a target of 5320. We will add to these long positions only above 5380.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
Nifty may again open with a unsustainable up gap only to close in the Red As discussed on Friday, the Nifty opened with a positive gap that was never sustained during the entire trading day. After opening at 5326, the Nifty traded below that mark for the entire day, before closing at 5284. Today again a repeat performance is expected, and hence, Friday's trading plans are what we will trade on today as well.Happy Trading !!! For cash market recommendations see our Daily Pre Market calls on NSE
Nifty may again open with a unsustainable up gap only to close in the Red
As discussed on Friday, the Nifty opened with a positive gap that was never sustained during the entire trading day. After opening at 5326, the Nifty traded below that mark for the entire day, before closing at 5284. Today again a repeat performance is expected, and hence, Friday's trading plans are what we will trade on today as well.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
Nifty Weekly Review The Nifty ended the week on a weak note losing 77 points against the previous weekly close. This was in stark contrast to the 311 points gain during the week before last. Earlier this week, we had indicated that the Nifty was in an overbought zone and that the downtrend would continue. The markets did oblige and we were able to book good profits riding the volatility.The trading range for the Nifty during the week was between a high of 5360 and a low of 5202, which will form the trading range for the next week too. The next week has only 3 trading days with trading holidays on 07th Nov 2011 on account of Bakri-Id and on 10th Nov 2011 on account of Guru Nanak Jayanti.In the above chart, the Bollinger Bands are suggesting a falling trend-line. The EMAs are attracting each other however the near EMA is trading below the far EMA. The MACD is rising from a negative zone. The ADX is suggesting a trend-less market.We believe, that during the next week, the volatility will be high and that a break-out from the current trading range is going to be difficult.The strategy would be to look out to buy Nifty 5400 puts when ever the markets are trading above 5340 and to liquidate them when the Nifty trades around 5240.Another way to look at this would be to buy 5200 Nifty Calls when ever the Nifty trades at the bottom of the range and liquidate them above 5360.Happy Trading !!! For cash market recommendations see our Daily Pre Market calls on NSE
Nifty Weekly Review
The Nifty ended the week on a weak note losing 77 points against the previous weekly close. This was in stark contrast to the 311 points gain during the week before last. Earlier this week, we had indicated that the Nifty was in an overbought zone and that the downtrend would continue. The markets did oblige and we were able to book good profits riding the volatility.
The trading range for the Nifty during the week was between a high of 5360 and a low of 5202, which will form the trading range for the next week too. The next week has only 3 trading days with trading holidays on 07th Nov 2011 on account of Bakri-Id and on 10th Nov 2011 on account of Guru Nanak Jayanti.
In the above chart, the Bollinger Bands are suggesting a falling trend-line. The EMAs are attracting each other however the near EMA is trading below the far EMA. The MACD is rising from a negative zone. The ADX is suggesting a trend-less market.
We believe, that during the next week, the volatility will be high and that a break-out from the current trading range is going to be difficult.
The strategy would be to look out to buy Nifty 5400 puts when ever the markets are trading above 5340 and to liquidate them when the Nifty trades around 5240.
Another way to look at this would be to buy 5200 Nifty Calls when ever the Nifty trades at the bottom of the range and liquidate them above 5360.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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Disclaimer : We express our opinions on this blog primarily as a method of record keeping, i.e. archiving what was our opinion about the markets on any given particular day end. As such, trading in derivatives can be extremely dangerous to you and your finances. We strongly advice you to consult your financial advisor before trading based on the opinions published on this blog. We shall not be held responsible, under any circumstances, for any financial loss or profit, that may be accrued due to your trades being affected by our opinions.
