Nifty - 17 Jul 2014 - Bullish equilibrium

Nifty rises 200 points in 2 days. Momentum with Bulls now. But resistance at 7700.

As discussed yesterday, the Bulls had promised buoyancy, and that played out during the trading session, with the Nifty remaining above its previous close for the entire session and in the last hour sky rocketing to 7640. The Nifty opened with a positive gap of 38 points at 7564 and stayed buoyant, dipping only to 7545 and then to 7532, while recovering almost immediately after the dips. In the last hour the Nifty swept past our identified resistance zone at 7590 7610 in a swift move with huge momentum to reach a high of 7640 before closing at 7624 with a huge gain of 98 points over its previous close. We took a trade on the long side and could book out with a profit of 35 points on that trade.

1) The Elder Ray readings : Bull Power rises from -36 to +61 Bear Power reduces from -112 to -46 indicating that although the momentum is with the Bulls, the Bears are still not out of the reckon. For today, the Bulls need to overcome the levels of 7650 to maintain their upwards momentum whereas the Bears need to breach the levels of 7530 to maintain their downwards momentum.

2) The stochastics are now in the neutral zone and are pointing upwards.

3) The Nifty has now closed 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 up move may continue for now. The MACD is also trying to turn positive with the histogram rising in the negative. The ADX is suggesting a rise in the Bullish momentum, but is not signalling a fall in the Bearish momentum as yet. The Parabolic SAR continues with its Sell signal with the SL now brought down to 7685.

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

a) Around 7565 we will open fresh long positions with a SL of 7540 and a target of 7675. We will add to these long positions only above 7710.

b) Around 7685 we will open fresh short positions with a SL of 7710 and a target of 7575. We will add to these short positions only below 7540.

Happy Trading !!! 

Buy call on ASAHIINDIA hit its target on 16 Jul 2014

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