Nifty - 19 Nov 2013 - Bulls need to follow up

After 2 days of rise, Bulls must show some follow up buying. Gaps need to sustain.

As discussed yesterday, we got a Bullish start to a fresh week. Riding on positive global cues and after a long weekend, the Nifty opened with a positive gap up of 55 points at 6111 and immediately crossed 6150. The Nifty then traded in a narrow range of 6165 and 6140 for most of the trading session. However, in the last hour of trade, the Nifty raged up to 6197 before closing at 6189 with a gain of 133 points. As intraday traders, we did not get any opportunity to Buy the Nifty in the morning hour and there was no trade available on the short side either. So, we watched the Nifty and sat outside on the fence.

1) The Elder Ray readings : Bull Power rises from -20 to +65 Bear Power reduces from -85 to -21 indicating that both the Bulls and the Bears are now in their respective zones and some fireworks can be expected. For today, the Bulls need to overcome the levels of 6210 to maintain their upwards momentum whereas the Bears need to breach the levels of 6140 to maintain their downwards momentum. 

2) The stochastics are in the neutral zone and are pointing upwards.

3) The Nifty has closed above all its key EMAs and also above all its key DMAs.

 

4) In the above chart, the volumes have increased with the rise in the Nifty, indicating that the up move may continue. The MACD is still pointing downwards, but the histogram is rising from the negative. The ADX is showing almost equilibrium, with a slight favor towards the Bears as yet. The Parabolic SAR continues with its sell signal with the SL now brought down to 6252.

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

a) Around 6230 we will open fresh short positions with a SL of 6255 and a target of 6155. We will add to these short positions only below 6130.

b) Around 6150 we will open fresh long positions with a SL of 6130 and a target of 6220. We will add to these long positions only above 6255.

Happy Trading !!!

Buy calls on SKSMICRO & ECLERX hit their targets on 18 Nov 2013 

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