Nifty shows glimpses of preparing for a down move. Test of supports at 7670 likely.
As discussed yesterday, we saw "Expiry Jitters" on the bourses as the Nifty lingered in a 20 point zone at almost the top end of the trading range for most of the morning trading session, before nosediving to close near the day's lows. The Nifty opened with a 6 point negative gap down at 7785 and attempted to regain the green but failed multiple times. This failure boosted the Bears who then, in the afternoon trade, pushed the Nifty down to our identified support zone of 7740. There was an attempt to recovery which fizzled out quickly at 7760 and the Nifty again plunged to the lows of 7714 before closing at 7721 with a loss of 90 points against its previous close. We took a trade on the long side and lost 24 points on that trade.
1) The Elder Ray readings : Bull Power reduces from +82 to +75 Bear Power also reduces from -9 to -4 indicating that both the parties have lost strength yet both are still in the reckon. For today, the Bulls need to overcome the levels of 7795 to maintain their upwards momentum whereas the Bears need to breach the levels of 7710 to maintain their downwards momentum.
2) The stochastics are on the boundary of the overbought zone and are pointing downwards.
3) The Nifty has closed below its 8EMA but above its 13EMA(7717) and 21EMA(7680) and has closed above all its key DMAs.