In yet another truncated week, Nifty may consolidate with a Bearish undertone.
In our last post, we had suggested to "Carry on shorting". The Nifty has since then lost about 120 points on a closing basis, and now seems to have entered a consolidation phase where it will wait for the averages to catch up before plunging down again. We have been on a trading holiday for the past couple of sessions. The Nifty has since then been trading around 5550 making a low of 5510.
Summary : The Nifty is in a consolidation mode and the bearish sentiment prevails. We have initiated a medium term short call on the Nifty which can be viewed here.
1) The Elder Ray readings : Bull Power rises from -178 to -137 Bear Power reduces from -252 to -204 indicating that the Bears have paused for recouping and the Bulls are far away from their safe zone yet. For today the Bulls need to overcome the levels of 5690 to regain their lost grounds whereas the Bears need to breach the levels of 5485 to maintain their downwards momentum.
2) The stochastics continue to remain in the oversold zone.
3) The Nifty continues to close well below all its key EMAs and also well below all its key DMAs.
4) In the above chart, the volumes have remained high with the rise in the Nifty indicating that the rise may continue. The MACD continues to fall with the histogram remaining in the negative. The ADX is suggesting a small loss of momentum for the bears and a small rise in momentum for the bulls. The Parabolic SAR continues with its sell signal with the SL now brought down to 5766.
5) Considering the above, our trading plan for the day is as under.
a) Around 5615 we will open fresh short positions with a SL of 5640 and a target of 5535. We will add to these short positions only below 5490.
b) Around 5515 we will open fresh long positions with a SL of 5490 and a target of 5575. We will add to these long positions only above 5535.
Happy Trading !!!
Also visit Just Nifty and the Nifty Range blogs.
For cash market recommendations see our Daily Pre Market calls on NSE
In our last post, we had suggested to "Carry on shorting". The Nifty has since then lost about 120 points on a closing basis, and now seems to have entered a consolidation phase where it will wait for the averages to catch up before plunging down again. We have been on a trading holiday for the past couple of sessions. The Nifty has since then been trading around 5550 making a low of 5510.
Summary : The Nifty is in a consolidation mode and the bearish sentiment prevails. We have initiated a medium term short call on the Nifty which can be viewed here.
1) The Elder Ray readings : Bull Power rises from -178 to -137 Bear Power reduces from -252 to -204 indicating that the Bears have paused for recouping and the Bulls are far away from their safe zone yet. For today the Bulls need to overcome the levels of 5690 to regain their lost grounds whereas the Bears need to breach the levels of 5485 to maintain their downwards momentum.
2) The stochastics continue to remain in the oversold zone.
3) The Nifty continues to close well below all its key EMAs and also well below all its key DMAs.
4) In the above chart, the volumes have remained high with the rise in the Nifty indicating that the rise may continue. The MACD continues to fall with the histogram remaining in the negative. The ADX is suggesting a small loss of momentum for the bears and a small rise in momentum for the bulls. The Parabolic SAR continues with its sell signal with the SL now brought down to 5766.
5) Considering the above, our trading plan for the day is as under.
a) Around 5615 we will open fresh short positions with a SL of 5640 and a target of 5535. We will add to these short positions only below 5490.
b) Around 5515 we will open fresh long positions with a SL of 5490 and a target of 5575. We will add to these long positions only above 5535.
Happy Trading !!!
Also visit Just Nifty and the Nifty Range blogs.
For cash market recommendations see our Daily Pre Market calls on NSE
Trading plan (a) has triggered. Opened fresh short position at 5615 with a SL of 5640
ReplyDeleteSquared off short position at 5605 and were able to book a profit of 15 points as the premium got squeezed further.
ReplyDelete