Nifty - 09 Jun 2014 - Bulls in charge

Bulls close the Nifty at all time high. Should be able to sustain this momentum now.

In our Friday's post, "EOW may be bullish" we had stated our expectations from the Bulls as "need a close today above 6505, better still above 6565" and how well did they respond. The Nifty which opened with a 47 point gap up at 7522, shook off the weak bulls by a quick dip to 7593 and then consistently kept on rising for the entire trading session thereafter. The Nifty finally made a high of 7593 before closing at the all time highest close of 7583 with a gain of 109 points over the previous close. We took a trade on the long side once the Nifty crossed over the opening mark after sustaining the lows at 7525 and booked out with a profit of 50 points at 7525.

1) The Elder Ray readings : Bull Power rises from +176 to +245 Bear Power reduces from +106 to +107 indicating that the Bulls are gaining in strength as of now. For today, the Bulls need to overcome the levels of 7635 to maintain their upwards momentum whereas the Bears need to breach the levels of 7385 to regain their lost grounds.

2) The stochastics have now re-entered the overbought zone and are pointing upwards yet.

3) The Nifty continues to close 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 can continue forwards. The MACD, which was threatening a Sell signal till now, seems to have aborted that attempt and is rising again, with the histogram also rising above the zero line. The ADX is also suggesting a rise in the Bullish momentum. The Parabolic SAR has now once again turned into a Buy signal with the initial SL placed at 7118.

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

a) Around 7575 we will open fresh long positions with a SL of 7550 and a target of 7645. We will add to these long positions only above 7670.

b) Around 7650 we will open fresh short positions with a SL of 7670 and a target of 7580. We will add to these short positions only below 7550.

Happy Trading !!! 

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