As expiry approaches, and the Nifty still in no man's land, beware of the whipsaw.
As discussed yesterday, it was a volatile day that unfolded, with the Nifty forming a "Long Legged Doji", one of the best examples of volatility. That volatile whipsaw is expected to continue, as the Nifty remains trend-less and stuck in no man's land. Today, given the global cues, the Nifty is likely to open with a small down gap, and is expected to swing wildly within 5150 and 5280.
1) The Elder Ray readings : Bull Power rises from -23 to -13 Bear Power reduces from -124 to -106 indicating that though the Bears have relented a bit, the Bulls were not aggressive enough to regain their territory, and are still in the negative power. For today, the Bulls need to cross over 5285 to regain their lost territory, whereas the Bears need to breach 5180 to retain their current momentum.
2) The Nifty continues to trade below its key EMAs and has given three consecutive closes below its 50 DMA which is at 5295 currently.
3) The stochastics are just in the oversold zone, and are pointing flat.
4) In the above chart, the volumes have increased with the Nifty actually getting nowhere, indicating that a new trend and a strong trend is about to emerge. The MACD continues to be negative, indicating a bearish bias. The ADX is suggesting a trend-less market with a slightly bearish bias. The Parabolic SAR continues to give out a sell signal. Overall, the market seems to be in the final stages of range-bound consolidation, and we will be waiting cautiously for the new trend to emerge.
5) Considering the above, our trading plan for the day is as under.
a) Around 5295, we will open fresh short positions with a SL of over 5330 and a target of 5190. We will add to these short positions only below 5155.
b) Around 5190, we will open fresh long positions with a SL of below 5170 and a target of 5270. We will add to these long positions only above 5330.
c) We will trade half of our normal trading volumes as, the SL limits have to be enlarged and the chances of hitting SL are that much more on such volatile days, especially when a new trend is expected to emerge.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed yesterday, it was a volatile day that unfolded, with the Nifty forming a "Long Legged Doji", one of the best examples of volatility. That volatile whipsaw is expected to continue, as the Nifty remains trend-less and stuck in no man's land. Today, given the global cues, the Nifty is likely to open with a small down gap, and is expected to swing wildly within 5150 and 5280.
1) The Elder Ray readings : Bull Power rises from -23 to -13 Bear Power reduces from -124 to -106 indicating that though the Bears have relented a bit, the Bulls were not aggressive enough to regain their territory, and are still in the negative power. For today, the Bulls need to cross over 5285 to regain their lost territory, whereas the Bears need to breach 5180 to retain their current momentum.
2) The Nifty continues to trade below its key EMAs and has given three consecutive closes below its 50 DMA which is at 5295 currently.
3) The stochastics are just in the oversold zone, and are pointing flat.
4) In the above chart, the volumes have increased with the Nifty actually getting nowhere, indicating that a new trend and a strong trend is about to emerge. The MACD continues to be negative, indicating a bearish bias. The ADX is suggesting a trend-less market with a slightly bearish bias. The Parabolic SAR continues to give out a sell signal. Overall, the market seems to be in the final stages of range-bound consolidation, and we will be waiting cautiously for the new trend to emerge.
5) Considering the above, our trading plan for the day is as under.
a) Around 5295, we will open fresh short positions with a SL of over 5330 and a target of 5190. We will add to these short positions only below 5155.
b) Around 5190, we will open fresh long positions with a SL of below 5170 and a target of 5270. We will add to these long positions only above 5330.
c) We will trade half of our normal trading volumes as, the SL limits have to be enlarged and the chances of hitting SL are that much more on such volatile days, especially when a new trend is expected to emerge.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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