Bears punch a huge 75 point gap and return with a Bang. Selling all rises to continue.
As discussed yesterday, at close last week, the Nifty had returned to a equilibrium. Owing to global cues however, the Nifty opened with a huge negative gap down of 80 points at 6186 and could recover hardly 5 points of that gap. The Bears stamped their authority for the entire trading session, by pushing down the Nifty by yet another 50 points by the end of day. The Nifty closed at 6136 after making a day low of 6130. We had a couple of lots of short positions taken at 6300 on Friday, which we squared off yesterday for a gain of 280 points in total.
1) The Elder Ray readings : Bull Power reduces from +48 to -74 Bear Power rises from -19 to -132 indicating that the Bears are now in full control of the Nifty with the Bulls needing to do some catch up. For today, the Bulls need to overcome the levels of 6245 to regain their lost grounds whereas the Bears need to breach the levels of 6105 to maintain their downwards momentum.
2) The fast stochastics are already in the oversold zone. But the slow stochastics are trailing way behind in the neutral zone, indicating that there is room for a further downside.
3) The Nifty has now closed below all its key EMAs and also below its 50DMA. However, it is still above its 100DMA(6106) and 200DMA(5961).
4) As seen in the above chart, the volumes have increased with the fall in the Nifty indicating that the down move may continue. The MACD has now triggered a shorting signal with the histogram too moving in the negative. The ADX is suggesting a rise in the Bearish momentum but signalling a slow down in the overall momentum. The Parabolic SAR now turns into a Sell signal with the initial SL put at 6356.
5) Considering the above, our trading plan for the day is as under.
a) Around 6170 we will open fresh short positions with a SL of 6195 and a target of 6110. We will add to these short positions only below 6080.
b) Around 6100 we will open fresh long positions with a SL of 6080 and a target of 6160. We will add to these long positions only above 6195.
Happy Trading !!!
Also visit Just Nifty and the Nifty Range blogs.
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed yesterday, at close last week, the Nifty had returned to a equilibrium. Owing to global cues however, the Nifty opened with a huge negative gap down of 80 points at 6186 and could recover hardly 5 points of that gap. The Bears stamped their authority for the entire trading session, by pushing down the Nifty by yet another 50 points by the end of day. The Nifty closed at 6136 after making a day low of 6130. We had a couple of lots of short positions taken at 6300 on Friday, which we squared off yesterday for a gain of 280 points in total.
1) The Elder Ray readings : Bull Power reduces from +48 to -74 Bear Power rises from -19 to -132 indicating that the Bears are now in full control of the Nifty with the Bulls needing to do some catch up. For today, the Bulls need to overcome the levels of 6245 to regain their lost grounds whereas the Bears need to breach the levels of 6105 to maintain their downwards momentum.
2) The fast stochastics are already in the oversold zone. But the slow stochastics are trailing way behind in the neutral zone, indicating that there is room for a further downside.
3) The Nifty has now closed below all its key EMAs and also below its 50DMA. However, it is still above its 100DMA(6106) and 200DMA(5961).
4) As seen in the above chart, the volumes have increased with the fall in the Nifty indicating that the down move may continue. The MACD has now triggered a shorting signal with the histogram too moving in the negative. The ADX is suggesting a rise in the Bearish momentum but signalling a slow down in the overall momentum. The Parabolic SAR now turns into a Sell signal with the initial SL put at 6356.
5) Considering the above, our trading plan for the day is as under.
a) Around 6170 we will open fresh short positions with a SL of 6195 and a target of 6110. We will add to these short positions only below 6080.
b) Around 6100 we will open fresh long positions with a SL of 6080 and a target of 6160. We will add to these long positions only above 6195.
Happy Trading !!!
Also visit Just Nifty and the Nifty Range blogs.
For cash market recommendations see our Daily Pre Market calls on NSE
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