After a 21 day rally, the Nifty is poised for a correction.As discussed since the start of this week, it was time for caution with the double top formation and the choppy session witnessed yesterday just about confirmed the possibility of the much awaited correction. Today, given the global cues the Nifty is likely to open with a flat to negative bias, and later in the day may witness some amount of selling.1) The Elder Ray readings : Bull Power reduces from +223 to +182 Bear Power increases from +133 to +110, indicating that although the Bears have gained some strength they are still some distance away from their territory. It has now been 21 consecutive sessions with the Bear Power being in the positive. 2) The Nifty is trading above all its key EMAs and the DMAs, however a key note is that the 200 DMA which was threatening to turn upwards, has now resumed its downward journey. Another caution indicator.3) The stochastics are still deep in the overbought zone.4) In the above chart, the volumes have increased with the Nifty trading well inside the previous day's range. This is a good indicator of indecision and a possible reversal. The MACD histogram is also showing negative divergence. The ADX is indicating that the down move is at its lowest point while the up move is losing momentum and is unsustainable.5) Considering the above, our trading plan for the day is as undera) Below 5380, we will open fresh short positions with a SL of 5395 and a target of 5310. We will add to these short positions only below 5285.b) Above 5305, we will open fresh long positions with a SL of 5285 and a target of 5365. We will add to these long positions only above 5410.Happy Trading !!! For cash market recommendations see our Daily Pre Market calls on NSE
After a 21 day rally, the Nifty is poised for a correction.
As discussed since the start of this week, it was time for caution with the double top formation and the choppy session witnessed yesterday just about confirmed the possibility of the much awaited correction. Today, given the global cues the Nifty is likely to open with a flat to negative bias, and later in the day may witness some amount of selling.
1) The Elder Ray readings : Bull Power reduces from +223 to +182 Bear Power increases from +133 to +110, indicating that although the Bears have gained some strength they are still some distance away from their territory. It has now been 21 consecutive sessions with the Bear Power being in the positive.
2) The Nifty is trading above all its key EMAs and the DMAs, however a key note is that the 200 DMA which was threatening to turn upwards, has now resumed its downward journey. Another caution indicator.
3) The stochastics are still deep in the overbought zone.
4) In the above chart, the volumes have increased with the Nifty trading well inside the previous day's range. This is a good indicator of indecision and a possible reversal. The MACD histogram is also showing negative divergence. The ADX is indicating that the down move is at its lowest point while the up move is losing momentum and is unsustainable.
5) Considering the above, our trading plan for the day is as under
a) Below 5380, we will open fresh short positions with a SL of 5395 and a target of 5310. We will add to these short positions only below 5285.
b) Above 5305, we will open fresh long positions with a SL of 5285 and a target of 5365. We will add to these long positions only above 5410.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
The Nifty may open positive today, but may not sustain the gaps.As discussed yesterday, the double top formation did bring about some selling / profit booking and the Nifty after opening above 5400 could not sustain the gap and closed in the negative at 5335. Today, given the global cues, the Nifty is again likely to open with a positive gap, but sustainability at higher levels is still questionable.1) The Elder Ray readings : Bull Power reduces from +224 to +223 Bear Power increases from +162 to +133, indicating that the Bulls have stopped to rejuvenate while the Bears are getting ready for a more meaningful attack.2) The Nifty is trading well above all its key EMAs and DMAs, the 200 DMA now being at 5187 which could turn out to be a key support.3) The stochastics are still deep in the overbought zone.4) In the above chart, the Nifty has touched the upper Bollinger Band indicating less room for any up-move. The MACD histogram has indicated a negative divergence whereas the ADX is indicating loss of steam for the up-move.5) Considering the above, our trading plan for the day is as undera) Below 5385, we will open fresh short positions with a SL of 5405 and a target of 5310. We will add to these short positions only below 5295.b) Above 5315, we will open fresh long positions with a SL of 5290 and a target of 5385. We will add to these long positions only above 5410.Happy Trading !!! For cash market recommendations see our Daily Pre Market calls on NSE
The Nifty may open positive today, but may not sustain the gaps.
As discussed yesterday, the double top formation did bring about some selling / profit booking and the Nifty after opening above 5400 could not sustain the gap and closed in the negative at 5335. Today, given the global cues, the Nifty is again likely to open with a positive gap, but sustainability at higher levels is still questionable.
1) The Elder Ray readings : Bull Power reduces from +224 to +223 Bear Power increases from +162 to +133, indicating that the Bulls have stopped to rejuvenate while the Bears are getting ready for a more meaningful attack.
2) The Nifty is trading well above all its key EMAs and DMAs, the 200 DMA now being at 5187 which could turn out to be a key support.
3) The stochastics are still deep in the overbought zone.
4) In the above chart, the Nifty has touched the upper Bollinger Band indicating less room for any up-move. The MACD histogram has indicated a negative divergence whereas the ADX is indicating loss of steam for the up-move.
5) Considering the above, our trading plan for the day is as under
a) Below 5385, we will open fresh short positions with a SL of 5405 and a target of 5310. We will add to these short positions only below 5295.
b) Above 5315, we will open fresh long positions with a SL of 5290 and a target of 5385. We will add to these long positions only above 5410.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
The Nifty is about to form a double top and oscillators are showing -ve divergence.As discussed yesterday, it was time for caution and the Nifty after opening higher, failed twice during the session to trade above 5390 (our yesterday's resistance level) before ending at 5362 which was 17 points below its opening mark. During the course of the day, the Nifty traded at a low of 5327, giving up all its gains of the positive opening. Today again, the Nifty is likely to open flat to positive, but is more likely to find resistance at 5400 5425 levels.1) The Elder Ray readings : Bull Power increases from +202 to +224 Bear Power reduces from +123 to +162 indicating that the Bulls are still going strong and the Bears have almost surrendered meekly. Any fall in the Nifty now can be seen as unwinding by the Bulls rather than a Bear attack.2) The Nifty is trading above all its key EMAs and the DMAs. The 200 DMA is threatening to turn upwards, unless arrested quickly.3) The stochastics are still deep into the overbought zone, however just a semblance of a negative divergence is emerging. 4) In the above chart, the volumes have increased with a red candle formation yesterday, indicating increasing of shorts in the system. The Nifty touched the upper Bollinger Band indicating lack of head room for an up-move. The MACD is also in the overbought zone, as well as the ADX is indicating unsustainable levels for this up-move.5) Considering the above, our trading plan for the day is as under..a) Below 5400, we will open fresh short positions with a SL of 5425 and a target of 5340. We will add to these shorts only below 5300.b) Above 5325, we will open fresh long positions with a SL of 5300 and a target of 5380. We will add to these long positions only above 5425.Happy Trading !!! For cash market recommendations see our Daily Pre Market calls on NSE
The Nifty is about to form a double top and oscillators are showing -ve divergence.
As discussed yesterday, it was time for caution and the Nifty after opening higher, failed twice during the session to trade above 5390 (our yesterday's resistance level) before ending at 5362 which was 17 points below its opening mark. During the course of the day, the Nifty traded at a low of 5327, giving up all its gains of the positive opening. Today again, the Nifty is likely to open flat to positive, but is more likely to find resistance at 5400 5425 levels.
1) The Elder Ray readings : Bull Power increases from +202 to +224 Bear Power reduces from +123 to +162 indicating that the Bulls are still going strong and the Bears have almost surrendered meekly. Any fall in the Nifty now can be seen as unwinding by the Bulls rather than a Bear attack.
2) The Nifty is trading above all its key EMAs and the DMAs. The 200 DMA is threatening to turn upwards, unless arrested quickly.
3) The stochastics are still deep into the overbought zone, however just a semblance of a negative divergence is emerging.
4) In the above chart, the volumes have increased with a red candle formation yesterday, indicating increasing of shorts in the system. The Nifty touched the upper Bollinger Band indicating lack of head room for an up-move. The MACD is also in the overbought zone, as well as the ADX is indicating unsustainable levels for this up-move.
5) Considering the above, our trading plan for the day is as under..
a) Below 5400, we will open fresh short positions with a SL of 5425 and a target of 5340. We will add to these shorts only below 5300.
b) Above 5325, we will open fresh long positions with a SL of 5300 and a target of 5380. We will add to these long positions only above 5425.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
The Nifty enters 20th consecutive session in overbought zone. Caution warranted.As discussed in our last post, Buy on Dips was the slogan for the day, and the Nifty after hovering in the negative, zoomed past 5300 to close at 5325 by the end of the day. Today, given the global cues, the Nifty is likely to open with a nice positive gap up, this is when caution is warranted as the Nifty will then trade deep into the overbought zone.1) The Elder ray readings : Bull Power increases from +189 to +202 Bear Power also increases from +125 to +123, indicating that the Bulls are still strong and can take the Nifty higher, however will they be able to retain these gains is questionable.2) The Nifty is trading above its key EMAs and its 200 DMA as well. The 200 DMA is at 5191 and will act as a strong support for now.3) The stochastics are deep into the overbought zone and are not showing any signs of weakness as yet.4) In the above chart, the volumes have depleted in last session, indicating loss of participation. The MACD histogram is stagnant and the ADX is hovering around unsustainable levels.5) Considering the above, our trading plan for the day is as undera) Above 5280 we will open fresh long positions with a SL of 5260 and a target of 5370. We will add to these long positions only above 5390.b) Below 5380, we will open fresh short positions with a SL o 5395 and a target of 5285. We will add to these short positions only below 5255.Happy Trading !!! For cash market recommendations see our Daily Pre Market calls on NSE
The Nifty enters 20th consecutive session in overbought zone. Caution warranted.
As discussed in our last post, Buy on Dips was the slogan for the day, and the Nifty after hovering in the negative, zoomed past 5300 to close at 5325 by the end of the day. Today, given the global cues, the Nifty is likely to open with a nice positive gap up, this is when caution is warranted as the Nifty will then trade deep into the overbought zone.
1) The Elder ray readings : Bull Power increases from +189 to +202 Bear Power also increases from +125 to +123, indicating that the Bulls are still strong and can take the Nifty higher, however will they be able to retain these gains is questionable.
2) The Nifty is trading above its key EMAs and its 200 DMA as well. The 200 DMA is at 5191 and will act as a strong support for now.
3) The stochastics are deep into the overbought zone and are not showing any signs of weakness as yet.
4) In the above chart, the volumes have depleted in last session, indicating loss of participation. The MACD histogram is stagnant and the ADX is hovering around unsustainable levels.
5) Considering the above, our trading plan for the day is as under
a) Above 5280 we will open fresh long positions with a SL of 5260 and a target of 5370. We will add to these long positions only above 5390.
b) Below 5380, we will open fresh short positions with a SL o 5395 and a target of 5285. We will add to these short positions only below 5255.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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Disclaimer : We express our opinions on this blog primarily as a method of record keeping, i.e. archiving what was our opinion about the markets on any given particular day end. As such, trading in derivatives can be extremely dangerous to you and your finances. We strongly advice you to consult your financial advisor before trading based on the opinions published on this blog. We shall not be held responsible, under any circumstances, for any financial loss or profit, that may be accrued due to your trades being affected by our opinions.
