Nifty - 25 Jun 2014 - Bulls take control

Consolidation over, Bulls take control of the Nifty emphatically. Follow up needed.

As discussed yesterday in our post "Neutrality maintained", the Nifty was poised in the neutral territory, waiting for direction. The Bulls came on to the scene and opened the Nifty with a 22 point positive gap up at 7515, which was never even threatened during the entire trading session thereafter. After a minor hiccup in our identified resistance zone of 7555 to 7575, the Nifty managed to overcome this and made a intraday high of 7593, dipped above 50 points and recovered, all in the last hour of trade, to close at 7580 with a gain of 87 points over its previous close. We took two trades on the long side and earned a total profit of 65 points in them.

1) The Elder Ray readings : Bull Power rises from +15 to +65 Bear Power reduces from -78 to -13 indicating that the Bulls have gained but the Bears are still in the reckoning. For today, the Bulls need to overcome the levels of 7605 to maintain their upwards momentum whereas the Bears need to breach the levels of 7510 to maintain their downwards momentum.

2) The stochastics are still in the neutral zone and are pointing across each other.

3) The Nifty has now 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 rise may continue. The MACD continues with its Sell signal, but the histogram rises yet remains in the negative. The ADX is now suggesting a rise in the Bullish momentum, but a fall in the overall momentum. The Parabolic SAR continues with its Buy signal with the SL now brought up to 7442.

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

a) Around 7520 we will open fresh long positions with a SL of 7490 and a target of 7620. We will add to these long positions only above 7665.

b) Around 7635 we will open fresh short positions with a SL of 7665 and a target of 7530. We will add to these short positions only below 7490.

Happy Trading !!! 

Buy calls on MAHINDCIE MAHINDUGIN & GRAVITA hit their targets on 24 Jun 2014

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