Nifty - 03 Jul 2014 - Momentum with the Bulls

Nifty enters and may sustain in unchartered zone, as Bulls pick up the momentum.

As discussed yesterday, Nifty was "Ready for newer skies" and it did not only enter newer skies but also sustained throughout the trading session, as the Bulls kept up the buying pressure. The Nifty opened with a positive gap up of 48 points at 7683 (above our identified breakout level of 7650), made a quick low of 7677 and then immediately soared above the 7700 mark. The Nifty kept on trading above this level with a couple of minor dips which got quickly bought into. The Nifty made a high of 7732 (again our identified target of the breakout) before closing at 7725 with a gain of 90 points over its previous close. We took a trade on the long side and booked out with a 50 points gain as our targets were achieved.

1) The Elder Ray readings : Bull Power rises from +98 to +156 Bear Power reduces from +67 to +101 indicating that the Bulls have not only gained strength by now, but they have also dragged the Bears away from their safe zone. For today, the Bulls need to overcome the levels of 7755 to maintain their upwards momentum whereas the Bears need to breach the levels of 7600 to regain their lost grounds.

2) The fast stochastics are already in the overbought zone but the slow stochastics are just below the overbought 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 increased with the rise in the Nifty indicating that the rise may continue. The MACD is also pushing towards a fresh buy signal with the histogram too rising from the negative zone. The ADX is suggesting a big rise in the Bullish momentum with the bottoming out of the overall momentum. The Parabolic SAR continues with its Buy signal with the SL now brought up to 7518.

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

a) Above 7710 we will open fresh long positions with a SL of 7690 and a target of 7770. We will add to these long positions only above 7805.

b) Around 7780 we will open fresh short positions with a SL of 7805 and a target of 7720. We will add to these short positions only below 7690.

Happy Trading !!! 

Buy calls on HOVS AHLUCONT KOPRAN MCX & CONCOR hit their targets on 02 July 2014

Also visit Just Nifty and the Nifty Range blogs.


For cash market recommendations see our Daily Pre Market calls on NSE