Nifty approaches key resistances in a downtrend. Expect volatility to rise now.
A couple of days ago we had suggested that Nifty may turn volatile within a range of 5550 and 5650. In the last two days of trading we have witnessed just that with the Nifty ranging between 5620 on the up side and 5548 on the low side. The overall trend still remains bearish and in the undertone Bearish mood still persists until the Bulls are able to close the Nifty above 5650. In yesterday's trade, our plan (a) triggered but did not reach its target nor did the stop loss trigger, and we booked out with a minor loss of 10 points.
1) The Elder Ray readings : Bull Power rises from -27 to -17 Bear Power reduces from -93 to -76 indicating that though the Bears have let off some steam, they are still holding the Bulls out of their territory. For today, the Bulls need to overcome the levels of 5635 to regain their lost grounds whereas the Bears need to breach the levels of 5560 to maintain their downwards momentum.
2) The Nifty has again closed below all its key DMAs which are inversely stacked and also below its 50DMA (5642). However, it has closed above its 100DMA and 200DMA.
3) The stochastics are now out of the oversold zone and are pointing upwards.
4) In the above chart, the volumes have decreased with the rise in the Nifty indicating that the rise may not sustain. The MACD is still in the negative with the histogram showing a slight rise. The ADX is showing some loss of momentum for the down move, but the downward direction is still the favored direction. The Parabolic SAR continues with its Buy signal with a far away stop loss.
5) Considering the above, our trading plan for the day is as under.
a) Around 5640 we will open fresh short positions with a SL of 5660 and a target of 5585. We will add to these short positions only below 5565.
b) Around 5580 we will open fresh long positions with a SL of 5565 and a target of 5620. We will add to these long positions only above 5660.
Happy Trading !!!
Also visit Just Nifty and the Nifty Range blogs.
For cash market recommendations see our Daily Pre Market calls on NSE
A couple of days ago we had suggested that Nifty may turn volatile within a range of 5550 and 5650. In the last two days of trading we have witnessed just that with the Nifty ranging between 5620 on the up side and 5548 on the low side. The overall trend still remains bearish and in the undertone Bearish mood still persists until the Bulls are able to close the Nifty above 5650. In yesterday's trade, our plan (a) triggered but did not reach its target nor did the stop loss trigger, and we booked out with a minor loss of 10 points.
1) The Elder Ray readings : Bull Power rises from -27 to -17 Bear Power reduces from -93 to -76 indicating that though the Bears have let off some steam, they are still holding the Bulls out of their territory. For today, the Bulls need to overcome the levels of 5635 to regain their lost grounds whereas the Bears need to breach the levels of 5560 to maintain their downwards momentum.
2) The Nifty has again closed below all its key DMAs which are inversely stacked and also below its 50DMA (5642). However, it has closed above its 100DMA and 200DMA.
3) The stochastics are now out of the oversold zone and are pointing upwards.
4) In the above chart, the volumes have decreased with the rise in the Nifty indicating that the rise may not sustain. The MACD is still in the negative with the histogram showing a slight rise. The ADX is showing some loss of momentum for the down move, but the downward direction is still the favored direction. The Parabolic SAR continues with its Buy signal with a far away stop loss.
5) Considering the above, our trading plan for the day is as under.
a) Around 5640 we will open fresh short positions with a SL of 5660 and a target of 5585. We will add to these short positions only below 5565.
b) Around 5580 we will open fresh long positions with a SL of 5565 and a target of 5620. We will add to these long positions only above 5660.
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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