Amidst contracting trading ranges, Bears trying to get their foot in.
As discussed yesterday, "Bulls showed signs of weakening", with the Nifty opening down with a negative gap of about 40 points, trading in a lower range for the entire session, and closing just below that, with a loss of about 42 points. For several days now, the trading range has been compacting, and a big move in either direction is being set up. We need to be ready to grab that move whenever it comes.
1) The Elder Ray readings : Bull Power reduces from +102 to +68 Bear Power rises from +62 to +25, indicating that Bears are trying to creep in slowly and steadily, yet the Bulls are not letting go that easily, thereby, creating a suspense on the further direction. For today, the Bulls need to overcome the levels of 5315 to maintain their upwards momentum, whereas, the Bears need to breach the Nifty below the levels of 5235 to regain their lost grounds.
2) The Nifty has closed just above its key EMAs, which are now showing signs of flattening. And, the Nifty is also above all its key DMAs.
3) The stochastics are still in the overbought zone, but are pointing downwards now.
4) In the above chart, the volumes have yet again reduced in yesterday's fall, making the down move slightly tentative. The MACD is showing negative divergence, supporting a further down move. The ADX is also suggesting some increase of momentum for the Bears. The Parabolic SAR has now turned into a Sell Signal, with a turnaround point at 5334.
5) Considering the above, our trading plan for the day is as under.
a) Around 5310, we will open fresh short positions with a SL of 5335 and a target of 5245. We will add to these short positions only below 5220.
b) Around 5240, we will open fresh long positions with a SL of 5220 and a target of 5300. We will add to these long positions only above 5335.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed yesterday, "Bulls showed signs of weakening", with the Nifty opening down with a negative gap of about 40 points, trading in a lower range for the entire session, and closing just below that, with a loss of about 42 points. For several days now, the trading range has been compacting, and a big move in either direction is being set up. We need to be ready to grab that move whenever it comes.
1) The Elder Ray readings : Bull Power reduces from +102 to +68 Bear Power rises from +62 to +25, indicating that Bears are trying to creep in slowly and steadily, yet the Bulls are not letting go that easily, thereby, creating a suspense on the further direction. For today, the Bulls need to overcome the levels of 5315 to maintain their upwards momentum, whereas, the Bears need to breach the Nifty below the levels of 5235 to regain their lost grounds.
2) The Nifty has closed just above its key EMAs, which are now showing signs of flattening. And, the Nifty is also above all its key DMAs.
3) The stochastics are still in the overbought zone, but are pointing downwards now.
4) In the above chart, the volumes have yet again reduced in yesterday's fall, making the down move slightly tentative. The MACD is showing negative divergence, supporting a further down move. The ADX is also suggesting some increase of momentum for the Bears. The Parabolic SAR has now turned into a Sell Signal, with a turnaround point at 5334.
5) Considering the above, our trading plan for the day is as under.
a) Around 5310, we will open fresh short positions with a SL of 5335 and a target of 5245. We will add to these short positions only below 5220.
b) Around 5240, we will open fresh long positions with a SL of 5220 and a target of 5300. We will add to these long positions only above 5335.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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