Although staying Bullish, Nifty shows early signs of topping out. Caution solicited.
As discussed yesterday, we saw the Bulls on rampage, right at the opening of trading, and although the last 30 minutes of trade resemble a topping out pattern, the technicals still remain in favor of the Bulls. The Nifty opened with a positive gap up of 7 points at 6803 and then traded sluggishly within a confined range for the entire day, but all the time maintaining above the support zone (identified by us at 6740). However, the Bulls could make a high also below our identified resistance zone at 6840. The Nifty thus consolidated within a range of 6777 on the lower side and 6819 on the higher side. The Nifty closed flat at 6796. The last half hour of trade, where the Nifty lost all its daily gains, makes us wary of this uptrend getting halted. Also one need to watch out for a developing evening star pattern on the daily charts.
1) The Elder Ray readings : Bull Power reduces from +136 to +132 Bear Power also reduces from +36 to +90 indicating that the tug of war may have reached its decisive stage. For today, the Bulls need to overcome the levels of 6840 to maintain their upwards momentum whereas the Bears need to breach the levels of 6705 to regain their lost grounds.
2) The stochastics continue to remain in the overbought zone.
3) The Nifty continues to close above all its key EMAs and also above all its key DMAs.
Nifty retains uptrend intact making yet another all time high & all time high close.
As discussed yesterday, the Nifty tested supports and bounced back, to scale newer highs and retain most of the gains. The Nifty opened with a positive gap up of 27 points at 6722 and then traded sluggishly for the first 3 hours of trade, managing a high of just 6734 and a low of 6705. But during the later half, the Nifty broke out and entered our identified resistance zone of 6745 6765 range. Then in the 2:30 Factor, the Nifty broke out from this range and gained another 40 points to make a high of 6809 before closing at 6796 with a gain of 101 points. We took a trade in the short direction and booked a loss of 25 points.
1) The Elder Ray readings : Bull Power rises from +77 to +139 Bear Power reduces from +2 to +36 indicating that the Bulls seem to want to start afresh as the Bears could not take advantage of being so near to their safe zone. For today, the Bulls need to overcome the levels of 6830 to maintain their upwards momentum whereas the Bears need to breach the levels of 6690 to regain their lost grounds. This wide range is a indication to oncoming volatility.
2) The stochastics are back into the overbought zone now.
3) The Nifty continues to close above all its key EMAs and also all its key DMAs.
The recent upmove got arrested, tested supports and now seems ready to bounce.
As discussed on Monday, the upmove on the Nifty got arrested. The Nifty opened flat, made a lower high at 6725 (against the previous day's high of 6742), then made a lower low at 6650 (against the previous day's low of 6685) and closed flat at 6695 with a gain of just 1 point. Now to resume the uptrend it has to hold this low of 6650 and make a higher high above 6742. Till then the Nifty may remain in a narrow trading range and be susceptible to a larger correction. We took a trade on the long side, and booked out with a mild profit of 12 points as we did not want to wait out in the 2:30 factor volatility.
1) The Elder Ray readings : Bull Power reduces from +101 to +77 Bear Power rises from +45 to +2 indicating that the Bears have almost regained safety, however, Bulls are still the stronger side. For today, the Bulls need to overcome the levels of 6735 to maintain their upwards momentum whereas the Bears need to breach the levels of 6655 to regain their lost grounds.
2) The stochastics have just moved out of the overbought zone and are slightly below that.
3) The Nifty continues to close above all its key EMAs and also above all its key DMAs.
Recent up move in Nifty seems to have stalled with profit booking having started.
As discussed on Friday, the profit booking set in on the Nifty and Nifty closed in the red for two consecutive sessions now. The Nifty opened with a mild positive gap up of 2 points at 6742 and then immediately started its slide towards the 6700 levels, where it found some support but could not capitalize on that support and again got sold off. The Nifty made a low of 6685 before closing at 6694 with a loss of 42 points. We did not participate in the trade despite our trading plan to go long had triggered, as we had got whipsawed just one day ago. Also to be noted is that now the Nifty is making lower highs and lower lows since last two trading sessions.
1) The Elder Ray readings : Bull Power reduces from +145 to +101 Bear Power rises from +65 to +44 indicating that the Bulls are still in command but the Bears are within striking distance from safety. For today, the Bulls need to overcome the levels of 6755 to maintain their upwards momentum whereas the Bears need to breach the levels of 6645 to regain their lost grounds.
2) The stochastics are still in the overbought zone but are pointing downwards now.
3) The Nifty continues to close above all its key EMAs and also above all its key DMAs.
|
Disclaimer : We express our opinions on this blog primarily as a method of record keeping, i.e. archiving what was our opinion about the markets on any given particular day end. As such, trading in derivatives can be extremely dangerous to you and your finances. We strongly advice you to consult your financial advisor before trading based on the opinions published on this blog. We shall not be held responsible, under any circumstances, for any financial loss or profit, that may be accrued due to your trades being affected by our opinions.
