After a failed break out, the weak global cues prepare the Nifty for retest of supports.
As discussed on Friday, the Thursday's Breakout needed validation. However, this validation test failed, once the Nifty opened with a 15 point negative gap down and was not able to regain its highs through out the trading session. The only silver lining for the Bulls was that they did not allow the Bears to break the previous day's lows and have kept the up trend intact in that aspect. Today, given the global cues, the Nifty is likely to open again with a gap down, and retest its supports at 5610 5630 area.
1) The Elder Ray readings : Bull Power reduces from +45 to +34 Bear Power rises from -27 to -18 indicating that currently neither the Bulls nor the Bears are in control of the Nifty. For today, the Bulls need to take the Nifty above 5715 to maintain their upwards momentum whereas the Bears need to breach the Nifty below 5665 to maintain their downwards momentum.
2) The Nifty has closed just below its 8EMA (5685) but above its 13EMA (5678) and 21EMA (5650) and also above all its key DMAs.
3) The stochastics are still in the overbought zone.
4) In the above chart, the volumes have decreased with the fall in the Nifty making the downfall less sustainable. The MACD continues to fall with the histogram remaining in the negative. The ADX is suggesting a lowering of the momentum for the up move, but the Bulls are still favored. The Parabolic SAR holds out its buy signal.
5) Considering the above, our trading plan for the day is as under.
a) Above 5630, we will open fresh long positions with a SL of 5610 and a target of 5700. We will add to these long positions only above 5755.
b) Around 5730 we will open fresh short positions with a SL of 5755 and a target of 5680. We will add to these short positions only below 5610.
Happy Trading !!!
Also visit Just Nifty and the Nifty Range blogs.
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed on Friday, the Thursday's Breakout needed validation. However, this validation test failed, once the Nifty opened with a 15 point negative gap down and was not able to regain its highs through out the trading session. The only silver lining for the Bulls was that they did not allow the Bears to break the previous day's lows and have kept the up trend intact in that aspect. Today, given the global cues, the Nifty is likely to open again with a gap down, and retest its supports at 5610 5630 area.
1) The Elder Ray readings : Bull Power reduces from +45 to +34 Bear Power rises from -27 to -18 indicating that currently neither the Bulls nor the Bears are in control of the Nifty. For today, the Bulls need to take the Nifty above 5715 to maintain their upwards momentum whereas the Bears need to breach the Nifty below 5665 to maintain their downwards momentum.
2) The Nifty has closed just below its 8EMA (5685) but above its 13EMA (5678) and 21EMA (5650) and also above all its key DMAs.
3) The stochastics are still in the overbought zone.
4) In the above chart, the volumes have decreased with the fall in the Nifty making the downfall less sustainable. The MACD continues to fall with the histogram remaining in the negative. The ADX is suggesting a lowering of the momentum for the up move, but the Bulls are still favored. The Parabolic SAR holds out its buy signal.
5) Considering the above, our trading plan for the day is as under.
a) Above 5630, we will open fresh long positions with a SL of 5610 and a target of 5700. We will add to these long positions only above 5755.
b) Around 5730 we will open fresh short positions with a SL of 5755 and a target of 5680. We will add to these short positions only below 5610.
Happy Trading !!!
Also visit Just Nifty and the Nifty Range blogs.
For cash market recommendations see our Daily Pre Market calls on NSE
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