In a market that is heavily biased towards Bears, the Bulls fail to rally strong.
Yesterday, we had suggested that "Weekly supports were approaching" and that after a 5 consecutive streak of downturns, a bounce back was likely. The markets obliged, with the Nifty opening lower, but within a blink, rallied past key levels and made a strong attempt at the previous day's high of 5157. However, this failed attempt leads us into believing that the Bears will take inspiration now on, and we may see the downturn resuming. As said in our article, identifying market trends, the bulls need to consistently overcome highs to maintain their momentum.
1) The Elder Ray readings : Bull Power rises from -106 to -91 Bear Power reduces from -189 to -177, indicating that the Bulls have not been able to recover fully, and the Bears have not lost much in yesterday's rally. This also raises doubts on, whether this rally was due to fresh buying or due to short covering.
2) The Nifty continues to trade well below all its key EMAs and its key DMAs.
3) The stochastics are still well & deep into the oversold zone.
4) In the above chart, the volumes have remained almost stagnant, raising doubts on the sustenance of this rally. The MACD is showing some positive divergence, but it needs confirmation through a follow up buying of the Nifty. The ADX is indicating a strong trend that has a bearish bias. The Parabolic SAR continues with its sell signal.
5) Considering the above, our trading plan for the day is as under.
a) Below 4920, we will open fresh short positions with a SL of 4955 and a target of 4830. We will add to these short positions only below 4810.
b) Around 4820, we will open fresh long positions with a SL of 4810 and a target of 4900. We will add to these long positions only above 4955.
Happy Trading !!!
PS : We acknowledge, that the market operates as it does, because there are multiple views about the price movements in the market. If you have a different opinion, we would like to know about it. Please use the comments box below to let us know your point of view.
For cash market recommendations see our Daily Pre Market calls on NSE
Yesterday, we had suggested that "Weekly supports were approaching" and that after a 5 consecutive streak of downturns, a bounce back was likely. The markets obliged, with the Nifty opening lower, but within a blink, rallied past key levels and made a strong attempt at the previous day's high of 5157. However, this failed attempt leads us into believing that the Bears will take inspiration now on, and we may see the downturn resuming. As said in our article, identifying market trends, the bulls need to consistently overcome highs to maintain their momentum.
1) The Elder Ray readings : Bull Power rises from -106 to -91 Bear Power reduces from -189 to -177, indicating that the Bulls have not been able to recover fully, and the Bears have not lost much in yesterday's rally. This also raises doubts on, whether this rally was due to fresh buying or due to short covering.
2) The Nifty continues to trade well below all its key EMAs and its key DMAs.
3) The stochastics are still well & deep into the oversold zone.
4) In the above chart, the volumes have remained almost stagnant, raising doubts on the sustenance of this rally. The MACD is showing some positive divergence, but it needs confirmation through a follow up buying of the Nifty. The ADX is indicating a strong trend that has a bearish bias. The Parabolic SAR continues with its sell signal.
5) Considering the above, our trading plan for the day is as under.
a) Below 4920, we will open fresh short positions with a SL of 4955 and a target of 4830. We will add to these short positions only below 4810.
b) Around 4820, we will open fresh long positions with a SL of 4810 and a target of 4900. We will add to these long positions only above 4955.
Happy Trading !!!
PS : We acknowledge, that the market operates as it does, because there are multiple views about the price movements in the market. If you have a different opinion, we would like to know about it. Please use the comments box below to let us know your point of view.
For cash market recommendations see our Daily Pre Market calls on NSE
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