Nifty - 30 Apr 2014 - Bulls need to hold fort

With three consecutive days of sell off, Bulls need to protect 6700 aggressively.

As discussed yesterday, and considering the equilibrium that we had reached, we expected the Consolidation to continue, on the Nifty. The Bears however, had different ideas. The Nifty opened with a positive gap up of 8 points at 6769 and made a quick high of 6780 where the Bears struck in the first 15 minutes of trade and the Nifty plunged all the way down to 6711. From thereon, the consolidation started and the Nifty slowly crawled upwards and traded within a confined range of 6720 and 6750 for most of the trading session. A late attempt to recover got thwarted around 6765 and the Nifty again plunged downwards to breach the intraday low and make a new low of 6709 before closing at 6715 with a loss of 46 points. We took a trade on the long side as per our trading plan and could book out with a profit of 40 points.

1) The Elder Ray readings : Bull Power stagnates at +27 Bear Power rises from -8 to -44 indicating that the Bears are getting stronger but the Bulls cannot be ruled out as yet. For today, the Bulls need to overcome the levels of 6780 to maintain their upwards momentum whereas the Bears need to breach the levels of 6700 to maintain their downwards momentum.

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

3) The Nifty has taken support at its 21EMA(6712) but has closed below its 13EMA(6752) and 8EMA(6765). The Nifty has closed above all its key DMAs.

 

4) In the above chart, the volumes have remained low with the fall in the Nifty indicating that there could be support round the corner. The MACD is accelerating downwards with the histogram also growing in the negative. The ADX is now favoring the Bears but just, while is also indicating loss in the overall momentum. The Parabolic SAR maintains its Buy call with the SL now brought up to 6709.

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

a) Around 6755 we will open fresh short positions with a SL of 6775 and a target of 6680. We will add to these short positions only below 6655. 

b) Around 6675 we will open fresh long positions with a SL of 6655 and a target of 6745. We will add to these long positions only above 6775.

Happy Trading !!! 

Buy calls on KOPRAN SUNDRMFAST & FINCABLES hit their targets on 29 Apr 2014

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