Nifty - 26 Jun 2014 - Expiry Jitters

Nifty forms NR7 on eve of expiry, with Bulls holding on but lacking follow through.

As discussed yesterday, we saw Bulls retain their control over the Nifty but lacked the follow through that was expected after a emphatic up move post consolidation. The Nifty opened with a positive gap up of 8 points at 7589 and sheepishly throughout the trading session within a confined range of just 32 points between 7589 and 7557. The Nifty finally closed at 7569 with a loss of 11 points against its previous day close. We took two trades (via CALL options) on the long side and could book a total profit of 35 points in these trades.

1) The Elder Ray readings : Bull Power reduces from +65 to +55 Bear Power also reduces from -13 to +23 indicating that the Bulls have still retained their control and that the Bears are now out of their safe zone. For today, the Bulls need to overcome the levels of 7595 to maintain their upwards momentum whereas the Bears need to breach the levels of 7540 to regain their lost grounds.

2) The stochastics are right in the center of the neutral zone.

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 decreased with the fall in the Nifty indicating that the fall may get arrested soon. The MACD continues with its Sell signal but the histogram rises, yet remains in the negative. The ADX is suggesting a fall in the Bullish momentum but still favors the Bulls. The Parabolic SAR continues with its Buy signal with the SL now brought up to 7462. 

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

a) Around 7515 we will open fresh long positions with a SL of 7485 and a target of 7610. We will add to these long positions only above 7650.

b) Around 7620 we will open fresh short positions with a SL of 7650 and a target of 7525. We will add to these short positions only below 7485.

Happy Trading !!! 

Buy call on CANFINHOME hit its target on 25 Jun 2014

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