Nifty - 23 Jun 2014 - Neutral at start of week

At start of expiry week, Nifty stands neutral, trading rangebound in the lower band.

As discussed on Friday, it turned out to be a "Critical EOW" as the Nifty traded in a confined range of 64 points between 6561 on the higher side and 6497 on the lower side, after opening with a gain on 3 points at 7543 and closing at 7511 with a loss of 29 points. Thus the Nifty has now made a lower high and a lower low too. On the weekly charts too, the Nifty made a lower high and a lower low, thus indicating that the Bears are getting stronger, as the Bulls try to hold on to critical supports.

1) The Elder Ray readings : Bull Power reduces from +80 to +37 Bear Power rises from -24 to -27 indicating that both the Bulls and the Bears are now almost equidistant from the zero line. For today the Bulls need to overcome the levels of 7560 to maintain their upwards momentum whereas the Bears need to breach the levels of 7490 to maintain their downwards momentum.

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

3) The Nifty has now closed below its 8EMA and 13EMA but has closed above its 21EMA and all its key DMAs.

 

4) In the above chart, the volumes have decreased with the fall in the Nifty indicating that the fall may get arrested soon. The MACD is indicating a Sell signal with the histogram growing in the negative. The ADX is suggesting a fall in the Bullish momentum but is still favoring the Bulls. The Parabolic SAR continues with its Buy signal with the SL now brought up to 7413.

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

a) Around 7575 we will open fresh short positions with a SL of 7595 and a target of 7465. We will add to these short positions only below 7430.

b) Around 7455 we will open fresh long positions with a SL of 7430 and a target of 7560. We will add to these long positions only above 7595.

Happy Trading !!! 

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