Nifty - 31 Jul 2014 - Expiry Jitters !!!

Nifty seems all set for a Bullish expiry as well as month end. Expect volatility to rise.

Just as we said in our yesterday's post that the "Bulls are losing their grip", the Bulls came back strongly in the last hour of trade to regain the green territory, albeit after the Bears had a foot in. The Nifty opened almost flat and continued to fall in the morning trade. After opening at 7746 the Nifty slipped to 7708 (just within our identified zone of support) by the afternoon and then traded sluggishly below 7730 for almost a couple of hours. Just when the Bears started to feel comfortable, the Bulls came back and the Nifty saw a huge rise of 90 points to make a high of 7799 before closing at 7791 with a gain of 43 points over its previous close. We took a trade on the long side and could book out with a profit of 80 points on that trade.

1) The Elder Ray readings : Bull Power reduces from +96 to +82 Bear Power rises from +19 to -9 indicating that the Bears after just regaining their safe zone have allowed the Bulls to retain their advantage. For today, the Bulls need to overcome the levels of 7815 to maintain their upwards momentum whereas the Bears need to breach the levels of 7700 to maintain their downwards momentum. 

2) The stochastics are in the overbought zone and are pointing upwards yet.

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 up move may continue. The MACD continues to point Bullish with the histogram remaining in the positive. The ADX however, is suggesting a falling Bullish momentum. The Parabolic SAR continues with its Buy signal with the SL now brought up to 7599.

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

a) Around 7740 we will open fresh long positions with a SL of 7715 and a target of 7840. We will add to these long positions only above 7870.

b) Around 7850 we will open fresh short positions with a SL of 7870 and a target of 7750. We will add to these short positions only below 7715.

Happy Trading !!! 

Buy calls on BBTC INDOCO FEDDERLOYD and Sell call on IPCALAB hit their targets on 30 Jul 2014

Also visit Just Nifty and the Nifty Range blogs.


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