With the Nifty staging a breakout, the bullish trend may stay for a while.
As discussed during our last few posts, the Nifty was in a consolidation mood, and we were awaiting the next big move out of the trading range. This move came yesterday, with a big bang and the Nifty staged a breakout. While this up-trend may continue for a while, there are dangers ahead, and it will be interesting how the markets tackle these.
1) The Elder Ray readings : Bull Power rises from +27 to +108 Bear Power reduces from -36 to +20. This indicates that the Bears have lost their ground again and that the Bulls are in control.
2) The key EMAs are now pointing upwards and the Nifty is trading well above the EMAs. However, the DMAs are still pointing downwards. That is one of the dangers that lies ahead. The 50DMA is at 4877 and pointing downwards.
3) The stochastics are deep into the overbought zone. Another danger sign. However, it should be noted that the stochastics can stay in the overbought zone for a extended period in a strongly bullish market.
4) In the above chart, the Nifty is touching the upper Bollinger Band, indicating a hurdle ahead. The volumes in yesterday's rise have increased, confirming the up-trend. The MACD is rising, which is also a support to the up-trend. However, the ADX is suggesting that the downtrend still has left some steam.
5) Considering the above, our trading plan for the day is as under
a) Above 4825, we will open fresh long positions with a SL of 4800 and a target of 4880. We will add to these long positions only above 4910.
b) Below 4880, we will open fresh short positions with a SL of 4905 and a target of 4835. We will add to these short positions only below 4790.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed during our last few posts, the Nifty was in a consolidation mood, and we were awaiting the next big move out of the trading range. This move came yesterday, with a big bang and the Nifty staged a breakout. While this up-trend may continue for a while, there are dangers ahead, and it will be interesting how the markets tackle these.
1) The Elder Ray readings : Bull Power rises from +27 to +108 Bear Power reduces from -36 to +20. This indicates that the Bears have lost their ground again and that the Bulls are in control.
2) The key EMAs are now pointing upwards and the Nifty is trading well above the EMAs. However, the DMAs are still pointing downwards. That is one of the dangers that lies ahead. The 50DMA is at 4877 and pointing downwards.
3) The stochastics are deep into the overbought zone. Another danger sign. However, it should be noted that the stochastics can stay in the overbought zone for a extended period in a strongly bullish market.
4) In the above chart, the Nifty is touching the upper Bollinger Band, indicating a hurdle ahead. The volumes in yesterday's rise have increased, confirming the up-trend. The MACD is rising, which is also a support to the up-trend. However, the ADX is suggesting that the downtrend still has left some steam.
5) Considering the above, our trading plan for the day is as under
a) Above 4825, we will open fresh long positions with a SL of 4800 and a target of 4880. We will add to these long positions only above 4910.
b) Below 4880, we will open fresh short positions with a SL of 4905 and a target of 4835. We will add to these short positions only below 4790.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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