Nifty - 16 Jul 2014 - Bulls promise buoyancy

Nifty reclaims 7500 & promises buoyancy moving ahead. Yet, trading mode persists.

As discussed yesterday, in our post "Support @ 50DMA found", the Nifty remained in the positive territory for almost the entire trading session and closed well above the psychological level of 7500. The Nifty opened with a positive gap up of 37 points at 7491 and raced towards our identified resistance levels of 7515 7535 (where we opened intraday shorts). Having found resistance, the Nifty then dipped below 7500 and all the way down to 7459 where it found buying support and recovered fully to make a new intraday high at 7535 before closing at 7527 with a gain of 73 points over its previous close. We booked a profit of 40 points on the short trade taken.

1) The Elder Ray readings : Bull Power rises from -100 to -36 Bear Power reduces from -157 to -112, indicating that though the Bulls have reclaimed a lot, there is more for them to do to recover their lost territory. For today, the Bulls need to overcome the levels of 7565 to regain their lost grounds whereas the Bears need to breach the levels of 7445 to maintain their downwards momentum.

2) The stochastics are in the oversold zone and are looking to move upwards.

3) The Nifty continues to close below all its key EMAs but above all its key DMAs.

 

4) In the above chart, the volumes have remained low with the rise in the Nifty indicating that we may find resistance moving ahead. The MACD continues to plunge downwards, but the histogram is rising, yet being in the negative. The ADX is suggesting a rise in the Bullish momentum. The Parabolic SAR continues with its Sell signal with the SL now being brought down to 7714.

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

a) Around 7465 we will open fresh long positions with a SL of 7445 and a target of 7585. We will add to these long positions only above 7610.

b) Around 7590 we will open fresh short positions with a SL of 7610 and a target of 7470. We will add to these short positions only below 7445.

Happy Trading !!! 

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