Nifty - 17 Apr 2014 - Downturn to continue

After 8EMA, Nifty now closes below 13EMA. Is 21EMA next below 6650 today?

As discussed yesterday, the Nifty, which was sniffing at a breakdown, tried to remain afloat, but crumbled under pressure in the later half of the trading session. The Nifty opened with a negative gap down of 6 points at 6727 and attempted a move on the upside right at the start of the session, remaining above 6720 and making a high of 6749. However, in the afternoon session, the Nifty breached the levels of 6700 and even our identified support zone of 6690. The Nifty again tried a recovery from 6675 to 6705 (during which we got our 20 points) but this attempt got thwarted and the Nifty made a new low at 6665 before closing at 6675.

1) The Elder Ray readings : Bull Power reduces from +109 to +48 Bear Power rises from +7 to -35 indicating that the Bears have now regained their territory and that Both the Bull and the Bears are now almost equidistant. 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 6660 to maintain their downwards momentum.

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

3) The Nifty has now closed below its 8EMA and 13EMA. However, it has closed above its 21EMA and also above all its key DMAs.

Nifty - 16 Apr 2014 - Sniffing at a Breakdown

Nifty plunges 100 points in 10 minutes, then consolidates forming Bearish engulf.

As discussed yesterday, it was consolidation time on Nifty, but not before a 100 point nosedive. The Nifty opened with a positive gap up of 16 points at 6793, made a quick high of 6813 (right into our identified resistance zone) and then nosedived to 6712, all within the first 10 minutes of trade. That 6712 became the intraday low, was emphasized with the fact that the Nifty then consolidating within a range of 30 points for the entire trading session afterwards. Finally, the Nifty closed at 6733, with a loss of 43 points over the previous close. Although our trading plan did trigger, the Nifty's swift move did not allow our order to get triggered and we were left watching the market from the sidelines. The Bearish engulf that has formed now, is in the supply zone and needs to be respected. This will get negated or invalidated only on a close above 6793 which was yesterday's opening mark.

1) The Elder Ray readings : Bull Power rises from +89 to +109 Bear Power also rises from +43 to +7 indicating that the Bulls are still strong and that the Bears are also very close to their safe zone. For today, the Bulls need to overcome the levels of 6820 to maintain their upwards momentum whereas the Bears need to breach the levels of 6710 to regain their lost grounds.

2) The fast stochastics are now out of the overbought zone and are pointing downwards while the slow stochastics are still in the overbought zone.

3) The Nifty has closed below its 8EMA but has closed above its 13EMA(6705) and 21EMA(6643) and has also closed above all its key DMAs.

Nifty - 15 Apr 2014 - Consolidation time

After topping out and in a truncated trading week, Nifty may enter consolidation mode.

As discussed on Friday, the Nifty did confirm the early signs of topping out with a negative gap down opening of 38 points at 6758. The Nifty then traded sluggishly within a confined range between 6743 on the down side and on the higher side around 6775 for most of the trading session. The late afternoon attempt to breakout of this range got thwarted almost immediately and the Nifty after making a intraday high of 6789 closed at 6776 with a loss of 20 points against the previous close. We took a trade on the long side as per our trading plan and could book a profit of 30 points.

1) The Elder Ray readings : Bull Power reduces from +131 to +89 Bear Power rises from +90 to +43 indicating that the Bears are attempting a recovery. For today, the Bulls need to overcome the levels of 6805 to maintain their upwards momentum whereas the Bears need to breach the levels of 6710 to regain their lost grounds.

2) The stochastics continue to relish in the overbought zone.

3) The Nifty continues to close above all its key EMAs and also above all its key DMAs.