Nifty - 06 May 2014 - Rangebound gyrations continue

Nifty snaps 5 day falling streak. Ranged moves expected due to lack of intensity.

As discussed yesterday, the Nifty seemed to end its consolidation, by trading in the green for most of the trading session. The Nifty opened with a 13 point negative gap down at 6682 and immediately scaled to the levels of 6732 within the first few minutes of trade, only to get sold off to a level of 6690 in the next few minutes. Once this whipsaw was over, the Nifty then gyrated within a narrow range of 6700 and 6720 for most of the trading session. The Nifty's attempted breakout got thwarted at 6741 and the Nifty closed at 6699 after making a low of 6680.

1) The Elder Ray readings : Bull Power rises from 0 to +9 Bear Power also rises from -48 to -51 indicating that both the Bulls and the Bears are in their respective zones and that the Bears are having a slight advantage as of now. For today, the Bulls need to overcome the levels of 6745 to maintain their upwards momentum whereas the Bears need to breach the levels of 6670 to maintain their downwards momentum.

2) The stochastics are just touching at the top of the oversold zone now.

3) The Nifty has yet again closed below all its key EMAs and also below all its key DMAs.

 

4) In the above chart, the volumes have remained low with the rise in the Nifty indicating that the rise may not continue. The MACD continues to plunge downwards with the histogram too remaining in the negative. The ADX is suggesting a fall in the Bearish momentum. The Parabolic SAR continues to give out its Sell call with the SL now brought down to 6861.

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

a) Around 6665 we will open fresh long positions with a SL of 6645 and a target of 6720. We will add to these long positions only above 6755.

b) Around 6735 we will open fresh short positions with a SL of 6755 and a target of 6680. We will add to these short positions only below 6645.

Happy trading !!! 

Buy call on UNITEDBNK hit its target on 05 May 2014

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