Nifty - 08 Nov 2013 - Heading southwards

Nifty, after a evening star, reaffirms the down trend. Volatility may rise as Nifty dips.

In our yesterday's post, we expected the Trading range to shift lower. The Nifty after opening with a positive gap up of 14 points at 6229, breached the previous day's low of 6209 marginally, and then in a sudden spike, went all the way up to 6289. From thereon, the Bears took over, and the Nifty not only breached the day's low, but also the psychological level of 6190. It made a low of 6181 before closing at 6187 with a loss of 28 points. The Nifty has now made a lower high at 6289 and a lower low at 6181, which is indicative of the downward move, with the trading range shifting lower. We took a trade on the short side and could book a profit of 75 points in that trade.

1) The Elder Ray readings : Bull Power rises from +60 to +83 Bear Power also rises from -1 to -25 indicating that the volatility on the Nifty could rise from here and traders need to be cautious about not getting whipsawed. For today, the Bulls need to overcome the levels of 6290 to maintain their upwards momentum, whereas the Bears need to breach the levels of 6155 to maintain their downwards momentum.

2) The stochastics are right in the middle of the neutral zone and are pointing downwards.

3) The Nifty has closed below its 8EMA and 13EMA however it has closed above its 21EMA and above all its key DMAs.

Nifty - 07 Nov 2013 - Trading range shifting lower

Nifty confirms topping out patterns, the trading range shits lower nearing supports.

As discussed yesterday, the Evening star pattern had its effect as expected. The Nifty opened with a minor gap up of 7 points at 6261 and made a quick high of 6270 during the first few minutes of trade. From thereon, the Nifty started its drift downwards and in the late hours of trade, the Nifty made a low of 6209 before closing at 6215 with a loss of 38 points.

1) The Elder Ray readings : Bull Power reduces from +96 to +60 Bear Power rises from +36 to -1 indicating that the Bears have now regained their lost grounds but now need to defend that position very fiercely. For today, the Bulls need to overcome the levels of 6275 to maintain their upwards momentum whereas the Bears need to breach the levels of 6205 to maintain their downwards momentum.

2) The stochastics are now out of the overbought zone and are pointing downwards.

3) The Nifty has closed below its 8EMA but has closed above its 13EMA and 21EMA. The Nifty has also closed above all its key DMAs.

Nifty - 06 Nov 2013 - Evening star emerges

Nifty makes a bearish evening star pattern on daily charts. Bullish only above 6320.

As discussed yesterday, Nifty was nearing the tops. The Nifty opened with a 35 point gap down at 6282 and then traded in the negative for the entire trading session. Nifty made a high of 6305 and a low of 6244 before closing at 6253 with a loss of 64 points. Now Nifty needs to give two consecutive closes above 6305 to resume its up trend.

1) The Elder Ray readings : Bull Power reduces from +142 to +96 Bear Power rises from +110 to +36 indicating that the Bulls are losing grounds, but are yet safe in their territory, while the Bears need to do much more. For today, the Bulls need to overcome the levels of 6315 to maintain their upwards momentum whereas the Bears need to breach the levels of 6215 to regain their lost grounds.

2) The stochastics are in the overbought zone and are pointing downwards.

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

Nifty - 05 Nov 2013 - Nearing the tops

Overbought markets seem to be near topping out. Caution in long positions required.

As discussed on Friday, we got a Bullish start to a fresh series. The Nifty opened with a minor gap down of 9 points at 6290 and made a quick low of 6287 and swiftly climbed above 6300 to make a high of 6333 before closing at 6307. During the truncated special trading session on Sunday, the Nifty remained bullish making a all time high of 6343 before closing at 6317.

1) The Elder Ray readings : Bull Power reduces from +149 to +142 Bear Power also reduces from +76 to +110 indicating that the Bears are having their backs to the wall and the Bulls are merrily controlling the Nifty movements. For today, the Bulls need to overcome the levels of 6365 to maintain their upwards momentum whereas the Bears need to breach the levels of 6220 to regain their lost grounds.

2) The stochastics continue to remain in the overbought zone.

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