Nifty - 27 Jun 2014 - Neutral at start of series

Nifty stands neutral at the start of a fresh series, testing key support levels.

As discussed yesterday, we saw "Expiry Jitters" on the trading floor for almost the entire trading session. The series which saw a low of 7118 and a high of 7700, a whopping 600 point range almost, saw profit booking on the last day of the series, as expected. The Nifty opened with a negative gap down of 15 points at 7554 and then made a quick high of 7570, which got negated due to lack of follow through by the Bulls and dipped to our identified support zone around 7515. The Nifty then tried to bounce back from those supports but could climb only up to 7545 and gave away. In the final hour, the Nifty breached those supports and dipped to a low of 7481 before closing at 7493 with a loss of 76 points against its previous close. We took a trade on the long side at 7515 and booked out with a profit of 25 points.

1) The Elder Ray readings : Bull Power reduces from +55 to +42 Bear Power rises from +23 to -47 indicating that the Bears have now regained their territory and both the Bulls and the Bears are now equidistant in their respective safe zones. For today, the Bulls need to overcome the levels of 7565 to maintain their upwards momentum whereas the Bears need to breach the levels of 7475 to maintain their downwards momentum.

2) The fast stochastics are almost touching the oversold zone, but the slow stochastic is lagging behind.

3) The Nifty has closed below its 8EMA and 13EMA but has closed above its 21EMA(7478) and also has closed above all its key DMAs.

 

4) In the above chart the volumes have increased with the fall in the Nifty indicating that the fall may continue for now. The MACD continues with its Sell signal with the histogram now growing in the negative. The ADX is also suggesting a rise in the Bearish momentum and a fall in the Bullish momentum. The Parabolic SAR continues with its Buy signal with the SL now brought up to 7481.

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

a) Around 7435 we will open fresh long positions with a SL of 7415 and a target of 7540. We will add to these long positions only above 7570.

b) Around 7550 we will open fresh short positions with a SL of 7570 and a target of 7445. We will add to these short positions only below 7415.

Happy Trading !!! 

Buy calls on SUBROS JUSTDIAL TATAELXSI & NEULANDLAB and Sell call on KOTAKBANK hit their targets on 26 Jun 2014

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