The Nifty enters 20th consecutive session in overbought zone. Caution warranted.
As discussed in our last post, Buy on Dips was the slogan for the day, and the Nifty after hovering in the negative, zoomed past 5300 to close at 5325 by the end of the day. Today, given the global cues, the Nifty is likely to open with a nice positive gap up, this is when caution is warranted as the Nifty will then trade deep into the overbought zone.
1) The Elder ray readings : Bull Power increases from +189 to +202 Bear Power also increases from +125 to +123, indicating that the Bulls are still strong and can take the Nifty higher, however will they be able to retain these gains is questionable.
2) The Nifty is trading above its key EMAs and its 200 DMA as well. The 200 DMA is at 5191 and will act as a strong support for now.
3) The stochastics are deep into the overbought zone and are not showing any signs of weakness as yet.
4) In the above chart, the volumes have depleted in last session, indicating loss of participation. The MACD histogram is stagnant and the ADX is hovering around unsustainable levels.
5) Considering the above, our trading plan for the day is as under
a) Above 5280 we will open fresh long positions with a SL of 5260 and a target of 5370. We will add to these long positions only above 5390.
b) Below 5380, we will open fresh short positions with a SL o 5395 and a target of 5285. We will add to these short positions only below 5255.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed in our last post, Buy on Dips was the slogan for the day, and the Nifty after hovering in the negative, zoomed past 5300 to close at 5325 by the end of the day. Today, given the global cues, the Nifty is likely to open with a nice positive gap up, this is when caution is warranted as the Nifty will then trade deep into the overbought zone.
1) The Elder ray readings : Bull Power increases from +189 to +202 Bear Power also increases from +125 to +123, indicating that the Bulls are still strong and can take the Nifty higher, however will they be able to retain these gains is questionable.
2) The Nifty is trading above its key EMAs and its 200 DMA as well. The 200 DMA is at 5191 and will act as a strong support for now.
3) The stochastics are deep into the overbought zone and are not showing any signs of weakness as yet.
4) In the above chart, the volumes have depleted in last session, indicating loss of participation. The MACD histogram is stagnant and the ADX is hovering around unsustainable levels.
5) Considering the above, our trading plan for the day is as under
a) Above 5280 we will open fresh long positions with a SL of 5260 and a target of 5370. We will add to these long positions only above 5390.
b) Below 5380, we will open fresh short positions with a SL o 5395 and a target of 5285. We will add to these short positions only below 5255.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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