Highly overbought Nifty fall may get triggered if RBI disappoints.
With the expiry of the current series nearing, and the RBI announcing monetary policy today, the markets would be on the edge at the start of the session today. Technically, the Nifty is in the overbought zone but having defended the downturn for almost the entire month, the Bulls are unlikely to give away on the last two days of this series.
1) The Elder Ray readings : Bull Power reduces from +171 to +144 Bear Power increases from +111 to +106. Bears need a very big move to return to their own territory, and that is highly unlikely given the mood of the market. On the other hand, the Bulls seem to have exhausted by this prolonged up-move.
2) The Nifty continues to trade above its key EMAs and also above its 50 and 100 DMAs.
3) The stochastics are in highly overbought zone, but are not showing any signs of a downturn as yet.
4) In the above chart, the volumes have again depleted, indicating lack of participation in the market. The Nifty is seen leaving the upper Bollinger Band, indicating a possible start of a downturn. The MACD is also at its peak and the ADX is showing weakening of the up-move.
5) Considering the above, our trading plan for the day is as under
a) Below 5065 we will open fresh short positions with a SL of 5090 and a target of 5025. We will add to these short positions only below 5005.
b) Above 5010 we will open fresh long positions with a SL of 4990 and a target of 5060. We wll add to these long positions only above 5100.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
With the expiry of the current series nearing, and the RBI announcing monetary policy today, the markets would be on the edge at the start of the session today. Technically, the Nifty is in the overbought zone but having defended the downturn for almost the entire month, the Bulls are unlikely to give away on the last two days of this series.
1) The Elder Ray readings : Bull Power reduces from +171 to +144 Bear Power increases from +111 to +106. Bears need a very big move to return to their own territory, and that is highly unlikely given the mood of the market. On the other hand, the Bulls seem to have exhausted by this prolonged up-move.
2) The Nifty continues to trade above its key EMAs and also above its 50 and 100 DMAs.
3) The stochastics are in highly overbought zone, but are not showing any signs of a downturn as yet.
4) In the above chart, the volumes have again depleted, indicating lack of participation in the market. The Nifty is seen leaving the upper Bollinger Band, indicating a possible start of a downturn. The MACD is also at its peak and the ADX is showing weakening of the up-move.
5) Considering the above, our trading plan for the day is as under
a) Below 5065 we will open fresh short positions with a SL of 5090 and a target of 5025. We will add to these short positions only below 5005.
b) Above 5010 we will open fresh long positions with a SL of 4990 and a target of 5060. We wll add to these long positions only above 5100.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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