Nifty turns mildly bullish, but future course depends on follow up action by the Bulls.
Our last weekly review, we had indicated "Bearish start to the fresh series unfolds, but supports galore at slightly lower levels.", and the Nifty obliged by taking supports around 4770 and the closing at the weekly top of 5068.
At the start of the week, the Nifty saw "Bearish mood persist", then "Enter the consolidation mode" and then after this consolidation, there were "No clear breakout signals" and there was a "volatile end to the week".
During the past week, the Nifty has staged a smart rally, and have left the bears gaping with wilderness. However, it will the next week that will define the future course of direction for the Nifty. A detailed technical analysis, would help us draw out a trading plan to decide our course of action in the next week.
For the next week,
1) The Elder Ray readings : On a weekly basis, the Bull Power has risen from -50 to +14 the Bear Power has also risen from -239 to -300, indicating the volatility that we have seen in the past week. It is also an indication, that the Bulls have regained their safe zone while the Bears have had their share of momentum too. For the next week, the Bulls need to overcome 5090 to retain their upwards weekly momentum, whereas the Bears have a tough target of breaching 4765 on the downside to retain their downwards weekly momentum. This is a perfect recipe for a trend deciding week amidst rising volatility. We need to follow the rules of trend identification very closely while executing our trades during this week.
2) The Nifty is trading above its 8week EMA and 13week EMA, however is below its 21week EMA which is at 5102. On the weekly SMA front, the Nifty is below its 50 week SMA and its 100 week SMA. However it is above its 200 week SMA which is at 4827.
3) In the above chart, the volumes have remained stagnant while the Nifty has risen from its supports, indicating this could be more of short covering than of fresh buying. Only a follow up action in prices would confirm the move. The weekly MACD is still in the negative but is rising, which is indicative of a pending up move on the Nifty. The ADX is suggesting a weakening of the down move, but is also stopping short of suggesting a strengthening of the up move. The weekly Parabolic SAR continues to hold out a Sell Signal.
4) The technical signals are giving out mixed indications and the Nifty is poised right in the middle of the clusters of supports and resistances, making it vulnerable to a big move in either direction.
5) Considering the above, our weekly trading plan is as under.
a) Around 5100, we will open fresh short positions with a SL of 5160 and a target of 4900. We will add to these short positions only below 4845.
b) Around 4900, we will open fresh long positions with a SL of 4850 and a target of 5100. We will add to these long positions only above 5165 for a target of 5240 and then 5280.
c) Considering the possibility of increase in volatility, we will trail our stop loss to preserve our profits, whenever our trades trigger.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
Our last weekly review, we had indicated "Bearish start to the fresh series unfolds, but supports galore at slightly lower levels.", and the Nifty obliged by taking supports around 4770 and the closing at the weekly top of 5068.
At the start of the week, the Nifty saw "Bearish mood persist", then "Enter the consolidation mode" and then after this consolidation, there were "No clear breakout signals" and there was a "volatile end to the week".
During the past week, the Nifty has staged a smart rally, and have left the bears gaping with wilderness. However, it will the next week that will define the future course of direction for the Nifty. A detailed technical analysis, would help us draw out a trading plan to decide our course of action in the next week.
For the next week,
1) The Elder Ray readings : On a weekly basis, the Bull Power has risen from -50 to +14 the Bear Power has also risen from -239 to -300, indicating the volatility that we have seen in the past week. It is also an indication, that the Bulls have regained their safe zone while the Bears have had their share of momentum too. For the next week, the Bulls need to overcome 5090 to retain their upwards weekly momentum, whereas the Bears have a tough target of breaching 4765 on the downside to retain their downwards weekly momentum. This is a perfect recipe for a trend deciding week amidst rising volatility. We need to follow the rules of trend identification very closely while executing our trades during this week.
2) The Nifty is trading above its 8week EMA and 13week EMA, however is below its 21week EMA which is at 5102. On the weekly SMA front, the Nifty is below its 50 week SMA and its 100 week SMA. However it is above its 200 week SMA which is at 4827.
3) In the above chart, the volumes have remained stagnant while the Nifty has risen from its supports, indicating this could be more of short covering than of fresh buying. Only a follow up action in prices would confirm the move. The weekly MACD is still in the negative but is rising, which is indicative of a pending up move on the Nifty. The ADX is suggesting a weakening of the down move, but is also stopping short of suggesting a strengthening of the up move. The weekly Parabolic SAR continues to hold out a Sell Signal.
4) The technical signals are giving out mixed indications and the Nifty is poised right in the middle of the clusters of supports and resistances, making it vulnerable to a big move in either direction.
5) Considering the above, our weekly trading plan is as under.
a) Around 5100, we will open fresh short positions with a SL of 5160 and a target of 4900. We will add to these short positions only below 4845.
b) Around 4900, we will open fresh long positions with a SL of 4850 and a target of 5100. We will add to these long positions only above 5165 for a target of 5240 and then 5280.
c) Considering the possibility of increase in volatility, we will trail our stop loss to preserve our profits, whenever our trades trigger.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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