The nifty staged a smart rally yesterday. But needs to overcome near term road blocks.
As discussed yesterday, the Nifty came out of its "Sluggish Consolidation", and straight away set up the stage for a breakout. Within blink of an eye, it crossed 4925, which was identified buy us as a level where we would add fresh long positions, and then never really looked back. Today given the global cues, the Nifty is likely to open with a positive gap up, and continue the rally. However, there are some roadblocks in the 5060 5090 zone, which need to be overcome.
1) The Elder Ray readings : Bull Power rises from -12 to +87 Bear Power reduces from -63 to -37 indicating that the Bulls have gained the momentum on their side but the Bears need not be counted out yet. For today, the Bulls need to overcome 5025 to maintain their upwards momentum whereas the Bears need to breach below 4890 to maintain their downwards momentum. This wide range needs to be kept in mind for few trading sessions.
2) The Nifty is now trading above all its key EMAs but below all its key DMAs. The 50 DMA is just about to cross the 200 DMA on the downside within a couple of sessions, if the current rally fizzles out.
3) The fast stochastics are already in the overbought zone, but the slow stochastics are far behind and pointing upwards.
4) In the above chart, the volumes have increased in yesterday's rise in the Nifty, indicating good sustainability to this up move. The MACD has again started rising from the negative. The ADX is suggesting equal weight-age to both the Bulls and the Bears. The Parabolic SAR has now turned from Sell into a Buy.
5) Considering the above, our trading plan for the day is as under.
a) Around 5065, we will open fresh short positions with a SL of 5095 and a target of 4970. We will add to these short positions only below 4950.
b) Around 4970, we will open fresh long positions with a SL of 4955 and a target of 5050. We will add to these long positions only above 5100.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed yesterday, the Nifty came out of its "Sluggish Consolidation", and straight away set up the stage for a breakout. Within blink of an eye, it crossed 4925, which was identified buy us as a level where we would add fresh long positions, and then never really looked back. Today given the global cues, the Nifty is likely to open with a positive gap up, and continue the rally. However, there are some roadblocks in the 5060 5090 zone, which need to be overcome.
1) The Elder Ray readings : Bull Power rises from -12 to +87 Bear Power reduces from -63 to -37 indicating that the Bulls have gained the momentum on their side but the Bears need not be counted out yet. For today, the Bulls need to overcome 5025 to maintain their upwards momentum whereas the Bears need to breach below 4890 to maintain their downwards momentum. This wide range needs to be kept in mind for few trading sessions.
2) The Nifty is now trading above all its key EMAs but below all its key DMAs. The 50 DMA is just about to cross the 200 DMA on the downside within a couple of sessions, if the current rally fizzles out.
3) The fast stochastics are already in the overbought zone, but the slow stochastics are far behind and pointing upwards.
4) In the above chart, the volumes have increased in yesterday's rise in the Nifty, indicating good sustainability to this up move. The MACD has again started rising from the negative. The ADX is suggesting equal weight-age to both the Bulls and the Bears. The Parabolic SAR has now turned from Sell into a Buy.
5) Considering the above, our trading plan for the day is as under.
a) Around 5065, we will open fresh short positions with a SL of 5095 and a target of 4970. We will add to these short positions only below 4950.
b) Around 4970, we will open fresh long positions with a SL of 4955 and a target of 5050. We will 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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