Nifty - 06 Aug 2014 - Consolidation continues

Nifty consolidates within a broader range of 150 points. Needs to sustain 7700 now.

In our last post, we had suggested that "Nifty may consolidate now" and in the last couple of trading sessions, Nifty has done exactly that, albeit in a very wide range of almost 130 points in the last two days. However, on both the occasions, the Bulls have managed to close the Nifty at the higher end, indicative of Bullish undertones as of now. We took a trading holiday yesterday.

1) The Elder Ray readings : Bull Power rises from -4 to +46 Bear Power reduces from -76 to -67 indicating that both the Bulls and the Bears are in equilibrium as of now. For today, the Bulls need to overcome the levels of 7760 to maintain their upwards momentum whereas the Bears need to breach the levels of 7630 to maintain their downwards momentum.

2) The stochastics remain in the neutral zone and are pointing in opposite directions.

3) The Nifty has now closed above all its key EMAs and also above all its key DMAs.

Nifty - 04 Aug 2014 - Nifty may consolidate now

After a 200 point fall in 2 trading sessions, the Nifty may consolidate in a narrow range.

As discussed on Friday, we saw more than "Glimpses of a down trend" on the Nifty. The Nifty opened at 7663 (right into our identified support zone) and after making a quick low of 7650, went up sharply, first to the levels of 7695 and then to 7717, before turning downwards. From there, the Nifty traded in a narrow range for almost an hour or so, before beginning its downwards march furiously. The Nifty broke the support zone, breached 7600 and reached a low of 7594 before closing at 7603 with a loss of 118 points against its previous close. We took a trade on the long side and could garner 100 points on two lots with a timely exit. We did not take the short trade on offer and missed out on another 50 points or so.

1) The Elder Ray readings : Bull Power reduces from +75 to +16 Bear Power rises from -4 to -107 indicating that now the Bears are in the control, but have yet to dislodge the Bulls. For today, the Bulls need to overcome the levels of 7720 to maintain their upwards momentum whereas the Bears need to breach the levels of 7575 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 all its key EMAs but has closed above all its key DMAs.