Nifty - 24 Jun 2014 - Neutrality maintained

Nifty continues to stand neutral, trading in the lower band. Bearishness setting in.

As discussed yesterday, Nifty continued to be Neutral at the start of expiry week. The Nifty opened with a positive gap up of 3 points and looked to trade in the green for the first 30 minutes of trade, clocking a high of 7535. However, once the Nifty breached the opening mark and the levels of 7500, it started making new intraday lows (7465, 7448 and finally 7442) with intermittent bouts of buying. In the last 40 minutes, the Bulls came back and saw a sharp recovery of almost 70 points when the Nifty got back to 7512 and closed at 7493 with a loss of 18 points against its previous close. We took two trades on the long side and could book a profit of 42 points on those trades.

1) The Elder Ray readings : Bull Power reduces from +37 to +15 Bear Power rises from -27 to -78 indicating that the Bears have now got stronger but the Bulls are still in their safe zone. For today, the Bulls need to overcome the levels of 7540 to maintain their upwards momentum whereas the Bears need to breach the levels of 7435 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(7537) and its 13EMA(7520) however it has closed above its 21EMA(7457) and also closed above all its key DMAs.

 

4) In the above chart, the volumes have reduced with the fall in the Nifty indicating that the fall may get arrested soon. The MACD continues with its Sell signal and the histogram continues to grow in the negative. The ADX is suggesting a rise in the Bearish momentum but also indicating equality amongst the Bulls and the Bears. The Parabolic SAR continues with its Buy signal with the SL now brought up to 7436.

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

a) Around 7550 we will open fresh short positions with a SL of 7575 and a target of 7440. We will add to these short positions only below 7410.

b) Around 7435 we will open fresh long positions with a SL of 7410 and a target of 7545. We will add to these long positions only above 7575.

Happy Trading !!! 

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