Up gaps on the critically poised Nifty, are difficult to sustain. Whipsawing expected.
As discussed yesterday in our post, "Outlook not Bearish yet", the Nifty opened with a small gap down and then whipsawed dramatically between a 60 point range, before closing near the day's high with a gain of 40 points. During this volatility, the Bears have gained a slight advantage now, and a down trend could be just round the corner. The first signals of such a downtrend would appear if the Nifty sustains below today's opening mark and would get confirmed if the Nifty breaks yesterday's lows.
1) The Elder Ray readings : Bull Power reduces from +151 to +65 Bear Power rises from +2 to 0, indicating that the Bears have now regained their lost grounds and are ready for action. For today, the Bulls need to overcome 5125 to maintain their upwards momentum whereas the Bears need to breach the Nifty below 5055 to retain their restraint on the Nifty breakout.
2) The Nifty is trading above all its key EMAs and above its 50 and 200 DMA.
3) The stochastics are still hovering on the edge of the overbought zone, and are pointing horizontally.
4) In the above chart, the volumes have declined in yesterday's rise on the Nifty, a signal of creeping bearishness. The MACD is also falling. The ADX is suggesting a loss of momentum for the up move. However, the Parabolic SAR is continuing to hold on to its buy signal.
5) Considering the above, our trading plan for the day is as under.
a) Around 5145, we will open fresh short positions with a SL of 5175 and a target of 5090. We will add to these short positions only below 5070.
b) Around 5080, we will open fresh long positions with a SL of 5070 and a target of 5130. We will add to these long positions only above 5175.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed yesterday in our post, "Outlook not Bearish yet", the Nifty opened with a small gap down and then whipsawed dramatically between a 60 point range, before closing near the day's high with a gain of 40 points. During this volatility, the Bears have gained a slight advantage now, and a down trend could be just round the corner. The first signals of such a downtrend would appear if the Nifty sustains below today's opening mark and would get confirmed if the Nifty breaks yesterday's lows.
1) The Elder Ray readings : Bull Power reduces from +151 to +65 Bear Power rises from +2 to 0, indicating that the Bears have now regained their lost grounds and are ready for action. For today, the Bulls need to overcome 5125 to maintain their upwards momentum whereas the Bears need to breach the Nifty below 5055 to retain their restraint on the Nifty breakout.
2) The Nifty is trading above all its key EMAs and above its 50 and 200 DMA.
3) The stochastics are still hovering on the edge of the overbought zone, and are pointing horizontally.
4) In the above chart, the volumes have declined in yesterday's rise on the Nifty, a signal of creeping bearishness. The MACD is also falling. The ADX is suggesting a loss of momentum for the up move. However, the Parabolic SAR is continuing to hold on to its buy signal.
5) Considering the above, our trading plan for the day is as under.
a) Around 5145, we will open fresh short positions with a SL of 5175 and a target of 5090. We will add to these short positions only below 5070.
b) Around 5080, we will open fresh long positions with a SL of 5070 and a target of 5130. We will add to these long positions only above 5175.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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