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Friday 4 January 2013

Nifty - 04 Jan 2013 - Bulls still hold the sway

Nifty continues to gap up and consolidate. Bulls holding all the controls now.

As discussed yesterday, the Bulls maintained their way of gap up and consolidate in yesterday's session too. The Nifty opened with a positive gap of 26 points and then almost immediately struck the day's high at 6017 and then retreated. However, the falls were very much restricted and the Nifty again bounced back in the green. After a intraday low of 5987 and a gyration within a 20 point range, the Nifty finally closed at 6010, with a gain of 17 points. None of our trading plans got triggered, as often happens in such narrow ranged movements.

1) The Elder Ray readings : Bull Power reduces from +100 to +96 Bear Power rises from +76 to +65 indicating that the Bulls are still stronger than their opponents who are way out of the safe zone. For today, the Bulls need to overcome the levels of 6030 to maintain their upwards momentum whereas the Bears need to breach the levels of 5930 to regain their lost grounds.

2) The Nifty continues to close above all its key EMAs and also above all its key DMAs. 

3) The stochastics are now well into the overbought zone.

 


4) In the above chart, the volumes remain high as the Nifty rises indicating that the up move can continue. The MACD is showing breakout after consolidation with the histogram turning positive. The ADX is also suggesting a gain in momentum for the up move. The Parabolic SAR maintains its buy call with a SL of 5834.

5) Considering the above, our trading plan for the day is as under.

a) Around 5990 we will open fresh long positions with a SL of 5970 and a target of 6025. We will add to these long positions only above 6050.

b) Around 6030 we will open fresh short positions with a SL of 6050 and a target of 6000. We will add to these short positions only below 5970.

Happy Trading !!!    

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