Bearish start to the fresh series unfolds, but supports galore at slightly lower levels.
The past week was a week of expiry to the May series. We had suggested it would be "A volatile expiry week" ahead and also that it would be a "Chaotic Expiry". During the week, "Bulls regained their footing" in the midweek, only to lose out at the week end due to "Bearish Technical Signals" when we saw the Nifty plummet to weekly lows.
Our last weekly review said "After a choppy week, the Bears still in control of the Nifty, at start of the expiry week. " and we saw that unfold on Friday.
The forthcoming week is likely to see more action on the Nifty front and a good trading plan after some detailed technical analysis is the need of the hour.
1) The Elder Ray readings : On a weekly basis, Bull Power increased from -152 to -50 and Bear Power reduced from -304 to -239, indicating that though the Bears seem to be in control, they are losing some momentum, and the Bulls are slowly regrouping. For the next week, the Bulls need to overcome 5070 to return to safe zone whereas the Bears need to breach the Nifty below 4795 to maintain their downwards momentum.
2) The Nifty is trading well below all its key weekly EMAs and below its 50 week SMA and its 100 week SMA. The 200 week SMA at 4824 could lend some much required support to the Nifty in the short term.
3) In the above chart, the volumes have increased in the fall on the Nifty, indicating sustainability of the down move in the short term. The MACD is in the negative and is almost at the verge of turning upwards, indicating that the Nifty might be bottoming out. The ADX is also indicating a loss of momentum to the downtrend. The Parabolic SAR is continuing to hold out its Sell Signal.
4) The 200 week SMA, the near term lows of 4803 and 4788, and the upward slanting multi-year trend-line support at 4800, forms a cluster of supports, from where the Nifty can bounce back. However, if these supports are breached, then the fall may be fast and deep.
5) Considering the above, our trading plan for the week is as under.
a) Around 4740, we will open fresh long positions with a SL of 4700 and a target of 4880. We will add to these long positions only above 4945.
b) Around 4910, we will open fresh short positions with a SL of 4940 and a target of 4800 and then 4760. We will add to these short positions only below 4700.
c) We expect the weekly trading range to be confined to 4740 to 4940 with extended low and high pinned at 4700 and 4980 respectively, and we will use these extremes to open appropriate positions with a SL of 40 points.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
The past week was a week of expiry to the May series. We had suggested it would be "A volatile expiry week" ahead and also that it would be a "Chaotic Expiry". During the week, "Bulls regained their footing" in the midweek, only to lose out at the week end due to "Bearish Technical Signals" when we saw the Nifty plummet to weekly lows.
Our last weekly review said "After a choppy week, the Bears still in control of the Nifty, at start of the expiry week. " and we saw that unfold on Friday.
The forthcoming week is likely to see more action on the Nifty front and a good trading plan after some detailed technical analysis is the need of the hour.
1) The Elder Ray readings : On a weekly basis, Bull Power increased from -152 to -50 and Bear Power reduced from -304 to -239, indicating that though the Bears seem to be in control, they are losing some momentum, and the Bulls are slowly regrouping. For the next week, the Bulls need to overcome 5070 to return to safe zone whereas the Bears need to breach the Nifty below 4795 to maintain their downwards momentum.
2) The Nifty is trading well below all its key weekly EMAs and below its 50 week SMA and its 100 week SMA. The 200 week SMA at 4824 could lend some much required support to the Nifty in the short term.
3) In the above chart, the volumes have increased in the fall on the Nifty, indicating sustainability of the down move in the short term. The MACD is in the negative and is almost at the verge of turning upwards, indicating that the Nifty might be bottoming out. The ADX is also indicating a loss of momentum to the downtrend. The Parabolic SAR is continuing to hold out its Sell Signal.
4) The 200 week SMA, the near term lows of 4803 and 4788, and the upward slanting multi-year trend-line support at 4800, forms a cluster of supports, from where the Nifty can bounce back. However, if these supports are breached, then the fall may be fast and deep.
5) Considering the above, our trading plan for the week is as under.
a) Around 4740, we will open fresh long positions with a SL of 4700 and a target of 4880. We will add to these long positions only above 4945.
b) Around 4910, we will open fresh short positions with a SL of 4940 and a target of 4800 and then 4760. We will add to these short positions only below 4700.
c) We expect the weekly trading range to be confined to 4740 to 4940 with extended low and high pinned at 4700 and 4980 respectively, and we will use these extremes to open appropriate positions with a SL of 40 points.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
No comments:
Post a Comment
Please add your comments here. Comments will be moderated.