Nifty - 13 May 2014 - Bulls follow up

Nifty becomes extremely bullish with lots of steam still left in this leg of the upmove.

As discussed yesterday, the Nifty which has been hovering around all time highs, ventured "Back into unchartered territory", as the Nifty traded in a range where it has not traded ever. The Nifty opened at 6863 with a positive gap up of 5 points and immediately gained steam and soared over 6925, our identified resistance level, and then never really looked back apart from a couple of retraces which never came below by 25 30 points. The Nifty finally closed at 7014 after making a high of 7020, a gain of a whopping 155 points. We took a trade on the long side and garnered a profit of 80 points on that trade.

1) The Elder Ray readings : Bull Power rises from +140 to +248 Bear Power reduces from -79 to +91 indicating that the Bulls have now gained full control on the Nifty with the Bears losing their safe territory. For today, the Bulls need to overcome the levels of 7060 to maintain their upwards momentum whereas the Bears need to breach the levels of 6805 to regain their lost grounds.

2) The fast stochastics are well in the overbought zone, but the slow stochastics are still below the overbought zone, indicating further room for a upside move.

3) The Nifty has closed above all its key EMAs and also above all its key DMAs.

 

4) In the above chart, the volumes have increased with the rise in the Nifty indicating that the up move may continue. The MACD is about to trigger a upwards indication with the histogram also now moving above the zero line. The ADX is also suggesting a rise in the Bullish momentum but is suggesting a slowdown in the overall momentum. The Parabolic SAR continues with its Buy signal with the SL now brought up to 6646 from 6639.

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

a) Around 6975 we will open fresh long positions with a SL of 6950 and a target of 7060. We will add to these long positions only above 7100.

b) Around 7070 we will open fresh short positions with a SL of 7100 and a target of 6980. We will add to these short positions only below 6950.

Happy Trading !!! 

Buy calls on HDFCBANK IRB RELINFRA PRAKASH BALRAMCHIN & MUTHOOTFIN hit their targets on 12 May 2014

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