Nifty - 19 Jun 2014 - Volatile yet Bullish

Nifty makes higher high and higher low, yet closes in Red. Bulls in control as of now.

As discussed yesterday, "Bulls took over" the charge of the Nifty right at the start of the session and maintained the Nifty in the positive for the first couple of hours. The Nifty opened positive at 7636 and traded in the green, making a high of 7663. That is where the Bulls lacked follow up and the Nifty slipped in the red and dipped to 7516 within the next half an hour or so. Then came a recovery that took the Nifty almost a 100 points up and back in a highly volatile trading period. The Nifty finally closed at 7558 with a loss of 74 points against its previous close. We took a trade on the long side and got whipsawed, but lost only 20 points in that trade.

1) The Elder Ray readings : Bull Power rises from +120 to +139 Bear Power reduces from -9 to -8 indicating that the Bulls are strong as of now but the Bears cannot be ignored. For today, the Bulls need to overcome the levels of 7670 to maintain their upwards momentum whereas the Bears need to breach the levels of 7520 to maintain their downwards momentum.

2) The stochastics keep hovering on the edge of the overbought zone and are pointing flat.

3) The Nifty has closed below its 8EMA(7567) but has closed above its 13EMA(7524) and its 21EMA(7438) and is also above all its key DMAs.

 

4) In the above chart, the volumes have increased with the fall in the Nifty indicating that the fall may continue. The MACD continues to give out a Sell signal with the histogram too being below the zero line. The ADX is suggesting a fall in the Bullish momentum, but still favors the Bulls. The Parabolic SAR continues with its Buy signal with the SL now brought up to 7360.

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

a) Around 7500 we will open fresh long positions with a SL of 7470 and a target of 7615. We will add to these long positions only above 7650.

b) Around 7620 we will open fresh short positions with a SL of 7650 and a target of 7515. We will add to these short positions only below 7470.

Happy Trading !!! 

Buy calls on VISAKAIND & PEL hit their targets on 18 Jun 2014

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