Nifty - 18 Jun 2014 - Bulls take over

Bulls attempt to resume uptrend post a consolidation. Need to follow through.

In our yesterday's post, "Bears get a look in", we had suggested that Bears needed to sustain lower levels at least for a couple of sessions. That was not to happen. The Nifty, having opened with a negative gap down of 9 points at 7525, continued its consolidation for most part of the trading session yesterday, without even threatening to breach the previous day's lows. Then, in a late hour rush, the Bulls took the Nifty by the scruff and took it past 7600, to make a high of 7638 before closing at 7632, with a gain of 98 points over the previous close. We took a impromptu long position at 7540 and booked out at 7620 with a 80 points profit by the EOD. 

1) The Elder Ray readings : Bull Power rises from +50 to +120 Bear Power reduces from -11 to -9 indicating that the Bulls are in the drivers seat as of now. For today, the Bulls need to overcome the levels of 7655 to maintain their upwards momentum whereas the Bears need to breach the levels of 7525 to maintain their downwards momentum.

2) The stochastics are hovering on the edge of the overbought zone, pointing across.

3) The Nifty has now again 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 however, is indicating otherwise, with the histogram remaining below the zero line. The ADX is suggesting a resurgence in the Bullish momentum. The Parabolic SAR continues with its Buy signal with the SL now brought up to 7331.

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

a) Around 7560 we will open fresh long positions with a SL of 7540 and a target of 7670. We will add to these long positions only above 7720.

b) Around 7680 we will open fresh short positions with a SL of 7705 and a target of 7575. We will add to these short positions only below 7540.

Happy Trading !!! 

Buy call on KNRCON hit its target of 17 Jun 2014

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