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Monday 9 January 2012

Nifty - 09 Jan 2012 - Trendless markets

Nifty may remain range-bound within its current trading range.

As we have been discussing for the last few days, the Nifty has been consolidating in a very narrow range, with a few bouts of volatility. The same may continue for another day today. The markets seem to be waiting for a trigger to breakout from this range. It is better to let the markets decide the direction instead of trying to predict it.

1) The Elder Ray readings : Bull Power reduces from +58 to +30 Bear Power also reduces from +8 to +13 indicating that there is loss of momentum for both the Bulls and the Bears, and opening a position in such an environment can prove to be hasty and nasty.

2) The EMAs continue to point upwards, but are stacked in favour of the Bears. The DMAs continue to point downwards.

3) The stochastics are in the overbought zone and are pointing downwards, indicating that the downtrend may start soon.



4) In the above chart, the Bollinger Bands are flattening, indicating a consolidation phase on the Nifty. The MACD is in the negative and rising, indicating bullishness. However, the ADX is favouring the Bears.

5) Considering the above, we will avoid trading on the Nifty for a day today, and wait for the market to decide the direction and a clear signal to emerge.

Happy Trading !!! 

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