AD Code

Thursday 2 February 2012

Nifty - 02 Feb 2012 - Up and Above

The Nifty is poised to cross over 5300 levels with a positive gap up opening.

As discussed yesterday, the roadblocks to the bullish up-move held the Nifty in the negative zone for the first half of the session. However, once the bears weakness was obvious as they could not pull down the Nifty below 5140, the Bulls took over and the Nifty then jumped over the roadblocks to close at a handsome level of 5236. Today, given the global cues, the Nifty is likely to open with a positive gap up, and the next targets could be near 5300 5340, in a few sessions from now.

1) The Elder Ray readings : Bull Power rises from +170 to +172 Bear Power reduces from +75 to +86, indicating the strength of the Bulls and the weakness of the Bears in the current scenario.

2) The Nifty is now trading above all its key EMAs and all its key DMAs too. This is a clear bullish signal.

3) The stochastics are in the overbought zone, but have been there for 15 sessions now.



4) In the above chart, the volumes have again increased in yesterday's rise, confirming the up-trend. The MACD is peaking and the Histogram is stagnant, indicating some caution is required at higher levels. The ADX is also suggesting that the up-move may not be sustainable, however, it is also indicating loss of strength for the down-move.

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

a) Above 5210, we will open fresh long positions with a SL of 5190 and a target of 5280. We will add to these long positions only above 5295.

b) Below 5285, we will open fresh short positions with a SL of 5305 and a target of 5210. We will add to these short positions only below 5185.

Happy Trading !!! 

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