The weekly downturn has got arrested, but no signs of a rally yet. Pain continues.
Let us start with the week gone by,
On 14th May, we had said, "Sell on Rally continues", and we saw the Nifty getting sold into every rally towards its previous day's high of 4976, and could make a high only of 4957, before there was confusion all over, when the NSE futures & options servers gave away, and trading in the f&o section halted for more than 90 minutes almost. The Nifty finally managed to close with a 21 point loss at around 4910.
On 15th May, we had suggested that "The weekly supports were approaching" and again we saw Nifty open with a nice little gap down, and then rally immediately to its previous day's highs, and close with a gain of almost 35 points.
Then on 16th May, we had written that "This rally may not sustain", considering that it was not able to take out previous day's high successfully. Here again, the Nifty obliged by opening with a huge gap down and closing with a loss of 85 points at 4858.
On 17th May, we sensed that a "Whipsaw" was coming our way, and this whipsaw spread over the next two days, during which the Nifty saw a opening of 4880, high of 4922, low of 4789 and a close of 4890. So the Nifty gyrated withing these two days, 120 points without going anywhere.
Overall, the Nifty remained ranged withing 4950 and 4780 during the entire week, as discussed in our trading plan for the last week. As for the next week, the scene continues to be gloomy on the technical front, and we try to explain on that further below.
1) The Elder Ray readings : On a weekly basis, the Bull Power has reduced from -56 to -183 whereas the Bear Power has risen from -275 to -351, indicating that the Bears have kept their promise of the last week and are still driving the Nifty. For this week, the Bulls need to overcome 5105 to regain their lost grounds whereas the Bears need to breach below 4760 to maintain their downwards momentum.
2) On a weekly basis, the Nifty is still trading below all its key weekly EMAs and its weekly 50 and 100 weekly DMAs. The 200 Weekly DMA at 4820 may provide that vital support now.
3) In the above chart, the volumes have remained stagnant while the Nifty has fallen slightly, indicating continuation of the downtrend, albeit with a lesser momentum. The MACD continues to fall indicating a negative trend. The ADX is indicating a strong momentum with a clear bias towards the bears. The Parabolic SAR continues to hold its sell signal.
4) Overall, the Nifty remains bearish for a consecutive 5th week, with the trading range getting lower into 4760 and 5010 levels.
5) Considering the above, our trading plan for the week is as under.
a) Below 4880, we will open fresh short positions with a SL of 4910 and a target of 4810.
b) Above 4915, we will open fresh long positions with a SL of 4885 and a target of 5015.
c) Around 5015, we will open fresh short positions with a SL of 5045 and targets of 4820, 4785 and 4740.
d) Around 4750, we will open fresh long positions with a SL of 4730 and targets of 4915, 4955 and 5015.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
Let us start with the week gone by,
On 14th May, we had said, "Sell on Rally continues", and we saw the Nifty getting sold into every rally towards its previous day's high of 4976, and could make a high only of 4957, before there was confusion all over, when the NSE futures & options servers gave away, and trading in the f&o section halted for more than 90 minutes almost. The Nifty finally managed to close with a 21 point loss at around 4910.
On 15th May, we had suggested that "The weekly supports were approaching" and again we saw Nifty open with a nice little gap down, and then rally immediately to its previous day's highs, and close with a gain of almost 35 points.
Then on 16th May, we had written that "This rally may not sustain", considering that it was not able to take out previous day's high successfully. Here again, the Nifty obliged by opening with a huge gap down and closing with a loss of 85 points at 4858.
On 17th May, we sensed that a "Whipsaw" was coming our way, and this whipsaw spread over the next two days, during which the Nifty saw a opening of 4880, high of 4922, low of 4789 and a close of 4890. So the Nifty gyrated withing these two days, 120 points without going anywhere.
Overall, the Nifty remained ranged withing 4950 and 4780 during the entire week, as discussed in our trading plan for the last week. As for the next week, the scene continues to be gloomy on the technical front, and we try to explain on that further below.
1) The Elder Ray readings : On a weekly basis, the Bull Power has reduced from -56 to -183 whereas the Bear Power has risen from -275 to -351, indicating that the Bears have kept their promise of the last week and are still driving the Nifty. For this week, the Bulls need to overcome 5105 to regain their lost grounds whereas the Bears need to breach below 4760 to maintain their downwards momentum.
2) On a weekly basis, the Nifty is still trading below all its key weekly EMAs and its weekly 50 and 100 weekly DMAs. The 200 Weekly DMA at 4820 may provide that vital support now.
3) In the above chart, the volumes have remained stagnant while the Nifty has fallen slightly, indicating continuation of the downtrend, albeit with a lesser momentum. The MACD continues to fall indicating a negative trend. The ADX is indicating a strong momentum with a clear bias towards the bears. The Parabolic SAR continues to hold its sell signal.
4) Overall, the Nifty remains bearish for a consecutive 5th week, with the trading range getting lower into 4760 and 5010 levels.
5) Considering the above, our trading plan for the week is as under.
a) Below 4880, we will open fresh short positions with a SL of 4910 and a target of 4810.
b) Above 4915, we will open fresh long positions with a SL of 4885 and a target of 5015.
c) Around 5015, we will open fresh short positions with a SL of 5045 and targets of 4820, 4785 and 4740.
d) Around 4750, we will open fresh long positions with a SL of 4730 and targets of 4915, 4955 and 5015.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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