The Nifty is about to form a double top and oscillators are showing -ve divergence.
As discussed yesterday, it was time for caution and the Nifty after opening higher, failed twice during the session to trade above 5390 (our yesterday's resistance level) before ending at 5362 which was 17 points below its opening mark. During the course of the day, the Nifty traded at a low of 5327, giving up all its gains of the positive opening. Today again, the Nifty is likely to open flat to positive, but is more likely to find resistance at 5400 5425 levels.
1) The Elder Ray readings : Bull Power increases from +202 to +224 Bear Power reduces from +123 to +162 indicating that the Bulls are still going strong and the Bears have almost surrendered meekly. Any fall in the Nifty now can be seen as unwinding by the Bulls rather than a Bear attack.
2) The Nifty is trading above all its key EMAs and the DMAs. The 200 DMA is threatening to turn upwards, unless arrested quickly.
3) The stochastics are still deep into the overbought zone, however just a semblance of a negative divergence is emerging.
4) In the above chart, the volumes have increased with a red candle formation yesterday, indicating increasing of shorts in the system. The Nifty touched the upper Bollinger Band indicating lack of head room for an up-move. The MACD is also in the overbought zone, as well as the ADX is indicating unsustainable levels for this up-move.
5) Considering the above, our trading plan for the day is as under..
a) Below 5400, we will open fresh short positions with a SL of 5425 and a target of 5340. We will add to these shorts only below 5300.
b) Above 5325, we will open fresh long positions with a SL of 5300 and a target of 5380. We will add to these long positions only above 5425.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed yesterday, it was time for caution and the Nifty after opening higher, failed twice during the session to trade above 5390 (our yesterday's resistance level) before ending at 5362 which was 17 points below its opening mark. During the course of the day, the Nifty traded at a low of 5327, giving up all its gains of the positive opening. Today again, the Nifty is likely to open flat to positive, but is more likely to find resistance at 5400 5425 levels.
1) The Elder Ray readings : Bull Power increases from +202 to +224 Bear Power reduces from +123 to +162 indicating that the Bulls are still going strong and the Bears have almost surrendered meekly. Any fall in the Nifty now can be seen as unwinding by the Bulls rather than a Bear attack.
2) The Nifty is trading above all its key EMAs and the DMAs. The 200 DMA is threatening to turn upwards, unless arrested quickly.
3) The stochastics are still deep into the overbought zone, however just a semblance of a negative divergence is emerging.
4) In the above chart, the volumes have increased with a red candle formation yesterday, indicating increasing of shorts in the system. The Nifty touched the upper Bollinger Band indicating lack of head room for an up-move. The MACD is also in the overbought zone, as well as the ADX is indicating unsustainable levels for this up-move.
5) Considering the above, our trading plan for the day is as under..
a) Below 5400, we will open fresh short positions with a SL of 5425 and a target of 5340. We will add to these shorts only below 5300.
b) Above 5325, we will open fresh long positions with a SL of 5300 and a target of 5380. We will add to these long positions only above 5425.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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