The Nifty may open positive today, but may not sustain the gaps.
As discussed yesterday, the double top formation did bring about some selling / profit booking and the Nifty after opening above 5400 could not sustain the gap and closed in the negative at 5335. Today, given the global cues, the Nifty is again likely to open with a positive gap, but sustainability at higher levels is still questionable.
1) The Elder Ray readings : Bull Power reduces from +224 to +223 Bear Power increases from +162 to +133, indicating that the Bulls have stopped to rejuvenate while the Bears are getting ready for a more meaningful attack.
2) The Nifty is trading well above all its key EMAs and DMAs, the 200 DMA now being at 5187 which could turn out to be a key support.
3) The stochastics are still deep in the overbought zone.
4) In the above chart, the Nifty has touched the upper Bollinger Band indicating less room for any up-move. The MACD histogram has indicated a negative divergence whereas the ADX is indicating loss of steam for the up-move.
5) Considering the above, our trading plan for the day is as under
a) Below 5385, we will open fresh short positions with a SL of 5405 and a target of 5310. We will add to these short positions only below 5295.
b) Above 5315, we will open fresh long positions with a SL of 5290 and a target of 5385. We will add to these long positions only above 5410.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed yesterday, the double top formation did bring about some selling / profit booking and the Nifty after opening above 5400 could not sustain the gap and closed in the negative at 5335. Today, given the global cues, the Nifty is again likely to open with a positive gap, but sustainability at higher levels is still questionable.
1) The Elder Ray readings : Bull Power reduces from +224 to +223 Bear Power increases from +162 to +133, indicating that the Bulls have stopped to rejuvenate while the Bears are getting ready for a more meaningful attack.
2) The Nifty is trading well above all its key EMAs and DMAs, the 200 DMA now being at 5187 which could turn out to be a key support.
3) The stochastics are still deep in the overbought zone.
4) In the above chart, the Nifty has touched the upper Bollinger Band indicating less room for any up-move. The MACD histogram has indicated a negative divergence whereas the ADX is indicating loss of steam for the up-move.
5) Considering the above, our trading plan for the day is as under
a) Below 5385, we will open fresh short positions with a SL of 5405 and a target of 5310. We will add to these short positions only below 5295.
b) Above 5315, we will open fresh long positions with a SL of 5290 and a target of 5385. We will add to these long positions only above 5410.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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