Nifty - 04 Jun 2014 - Test of resistances

Nifty stays Bullish despite presence of resistances ahead. Buy on dips mode persists.

As discussed yesterday, we say "Bulls were back" in business as the RBI event turned into a non event actually and could not stir the sentiment apart from the usual event day volatility. The Nifty opened with a positive gap up of 13 points at 7375 and maintained its poise before the event. The volatility induced by the RBI announcement could stir the Nifty in a range of about 50 points as the Nifty dipped from 7380 to 7342 and recovered from there to make a new intraday high of 7425 before closing at 7416 with a gain of 53 points over the previous close. None of our trading plans triggered and we did not participate in the volatile trade.

1) The Elder Ray readings : Bull Power rises from +134 to +164 Bear Power reduces from +5 to +82 indicating that the Bulls are gaining in strength as of now. For today, the Bulls need to overcome the levels of 7455 to maintain their upwards momentum whereas the Bears need to breach the levels of 7285 to regain their lost grounds.

2) The stochastics are in the neutral zone and are pointing upwards.

3) The Nifty continues to close 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 giving a mixed signal with the histogram too diminishing but remaining above the zero line. The ADX is suggesting a rise in the Bullish momentum. The Parabolic SAR continues with its Sell signal with the SL now brought down from 7564 to 7546.

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

a) Around 7390 we will open fresh long positions with a SL of 7370 and a target of 7440. We will add to these long positions only above 7465.

b) Around 7445 we will open fresh short positions with a SL of 7465 and a target of 7395. We will add to these short positions only below 7370.

Happy Trading !!! 

Buy call on PAPERPROD hit its target on 03 Jun 2014

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