The Nifty has formed a Hanging Man in the supply zone. Correction expected
As discussed on Friday, the Bulls were on the roll and thus they opened the Nifty with a good positive gap and maintained the gains throughout the trading session. However, the 200 DMA at 5210 proved to be a strong resistance and the Nifty formed a Hanging Man formation on the daily charts just below this key level.
1) The Elder Ray readings : Bull Power increased from +198 to +208 Bear Power remained stagnant at +154, indicating that the Bulls are still in control and any dips should be used for buying.
2) The Nifty is trading above its key EMAs and also above its 50 and 100 DMAs. The 200 DMA now stands at 5207 and sustenance above this level would initiate fresh buying.
3) The stochastics are still in the overbought zone and are not showing any signs of coming down.
4) In the above chart, the volumes have slightly reduced. The Nifty continues to trade touching the upper Bollinger Band, indicating that caution must be exercised in any fresh buys. The MACD is pointing to a highly overbought market. The ADX continues to favor the current up-trend however, the sustainability of this is questionable now as per the ADX.
5) During the past 19 trading sessions, the Bears have failed to close the Nifty below its previous day's low on 18 occasions.
6) The next supports to the Nifty are 5175 and 5105.
7) Considering the above, our trading plan for the day is as under
a) Above 5155, we will open fresh long positions with a SL of 5125 and a target of 5205. We will add to these long positions above 5235 only.
b) Below 5230, we will open fresh short positions with a SL of 5245 and a target of 5175. We will add to these short positions only below 5105.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed on Friday, the Bulls were on the roll and thus they opened the Nifty with a good positive gap and maintained the gains throughout the trading session. However, the 200 DMA at 5210 proved to be a strong resistance and the Nifty formed a Hanging Man formation on the daily charts just below this key level.
1) The Elder Ray readings : Bull Power increased from +198 to +208 Bear Power remained stagnant at +154, indicating that the Bulls are still in control and any dips should be used for buying.
2) The Nifty is trading above its key EMAs and also above its 50 and 100 DMAs. The 200 DMA now stands at 5207 and sustenance above this level would initiate fresh buying.
3) The stochastics are still in the overbought zone and are not showing any signs of coming down.
4) In the above chart, the volumes have slightly reduced. The Nifty continues to trade touching the upper Bollinger Band, indicating that caution must be exercised in any fresh buys. The MACD is pointing to a highly overbought market. The ADX continues to favor the current up-trend however, the sustainability of this is questionable now as per the ADX.
5) During the past 19 trading sessions, the Bears have failed to close the Nifty below its previous day's low on 18 occasions.
6) The next supports to the Nifty are 5175 and 5105.
7) Considering the above, our trading plan for the day is as under
a) Above 5155, we will open fresh long positions with a SL of 5125 and a target of 5205. We will add to these long positions above 5235 only.
b) Below 5230, we will open fresh short positions with a SL of 5245 and a target of 5175. We will add to these short positions only below 5105.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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