With the Nifty stuck in congestion zone, beware of the whipsaw.
The expected selling did not emerge on Friday, although through out the session the Nifty, even after a good up gap opening, failed to cross 5340 emphatically. Today also, given the global cues, and the CRR cut announced by the RBI, the Nifty is likely to open with a positive gap. But once again, at higher levels, it is likely to meet with some fierce selling.
1) The Elder Ray readings : Bull Power rises from -88 to +10 Bear Power reduces from -160 to -41. This indicates that both the Bulls and the Bears are safe in their own territories, and both will have a big challenge on their hands, to drag the Nifty their way.
2) The Nifty continues to trade in the congestion zone between its key EMAs and its key DMAs. However, this time the advantage is slightly favoring the Bulls, unless the Bears take a quick and swift action.
3) The Stochastics are coming out of the oversold zone, and are now pointing upwards, again favoring the Bulls.
4) In the above chart, the volumes remain on the lower side even in Friday's up gap opening and positive closing, indicating lack of participation. The MACD continues to go down, however the Histogram is showing some positive divergence. The ADX is indicating the weakening of any trend in the market, which points to a range-bound trading session ahead. Also the ADX is stopping short of indicating a fresh buy signal. The Parabolic SAR, continues its sell signal, but if the Nifty touches 5400 in today's session, then the signal would turn into a Buy signal, which must be noted.
5) Considering the above, our trading plan for the day is as under
a) Around 5380, we will open fresh short positions with a SL of 5400 and a target of 5310. We will add to these short positions only below 5300.
b) Around 5310, we will open fresh long positions with a SL of 5300 and a target of 5380. We will add to these long positions only above 5405.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
The expected selling did not emerge on Friday, although through out the session the Nifty, even after a good up gap opening, failed to cross 5340 emphatically. Today also, given the global cues, and the CRR cut announced by the RBI, the Nifty is likely to open with a positive gap. But once again, at higher levels, it is likely to meet with some fierce selling.
1) The Elder Ray readings : Bull Power rises from -88 to +10 Bear Power reduces from -160 to -41. This indicates that both the Bulls and the Bears are safe in their own territories, and both will have a big challenge on their hands, to drag the Nifty their way.
2) The Nifty continues to trade in the congestion zone between its key EMAs and its key DMAs. However, this time the advantage is slightly favoring the Bulls, unless the Bears take a quick and swift action.
3) The Stochastics are coming out of the oversold zone, and are now pointing upwards, again favoring the Bulls.
4) In the above chart, the volumes remain on the lower side even in Friday's up gap opening and positive closing, indicating lack of participation. The MACD continues to go down, however the Histogram is showing some positive divergence. The ADX is indicating the weakening of any trend in the market, which points to a range-bound trading session ahead. Also the ADX is stopping short of indicating a fresh buy signal. The Parabolic SAR, continues its sell signal, but if the Nifty touches 5400 in today's session, then the signal would turn into a Buy signal, which must be noted.
5) Considering the above, our trading plan for the day is as under
a) Around 5380, we will open fresh short positions with a SL of 5400 and a target of 5310. We will add to these short positions only below 5300.
b) Around 5310, we will open fresh long positions with a SL of 5300 and a target of 5380. We will add to these long positions only above 5405.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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