AD Code

Wednesday 22 August 2012

Nifty - 22 Aug 2012 - Upswing continues

As Nifty continues to rise slowly & steadily, buy on dips is the mantra for trades.

As discussed yesterday, the Nifty continued to consolidate in a tight range of 25 points throughout the trading session, before galloping away in the last hour of trade to cross 5400 and to close well above that threshold. The trading range continued to contract as expected. Our trading plan (a) got triggered and hit the SL and we booked a loss of 25 points.

1) The Elder Ray readings : Bull Power rises from +90 to +100 Bear Power reduces from +32 to +43, indicating the intense grip of the Bulls over the Nifty. For today, the Bulls need to overcome the levels of 5440 on the Nifty to maintain their upwards momentum, whereas the Bears need to breach the Nifty below 5335 to regain their lost grounds.

2) The Nifty continues to trade above all its key EMAs and all its key DMAs.

3) The stochastics continue to remain well and deeply into the overbought zone.

 


4) In the above chart, the volumes have again decreased with the rising Nifty, indicating that one should wait for a dip to initiate long positions. The MACD continues to rise and remain in the positive zone. The ADX is also suggesting bias towards the bulls. The Parabolic SAR continues with its buy signal with the SL now at 5303.

5) Considering the above, our trading plan for the day is as under.

a) Around 5390, we will open fresh long positions with a SL of 5375 and a target of 5450. We will add to these long positions only above 5465.

b) Around 5455, we will open fresh short positions with a SL of 5465 and a target of 5405. We will add to these short positions only below 5375.

Happy Trading !!! 

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