Nifty - 01 Jul 2014 - Bulls promise upward thrust

Nifty positioned well to capture all time highs yet again. Bulls need a final thrust.

As discussed yesterday, the Nifty which was languishing in a Neutral mode, got tilted towards the Bulls right from the opening mark. The Nifty opened with a positive gap up of 25 points at 7534, made a quick low of 7532 and breached in a one swift move our identified resistance zone of 7560 7580. All of that in just the first 20 minutes of trade. The Nifty then continued to rise consistently throughout the day, with a minor hiccup around 7605, which failed to breach 7580 again, and then the Nifty made a high of 7624 before closing at 7611, a gain of 103 points over its previous close. We took a trade on the long side on breach of the resistance zone and could book a profit of 35 points on that trade.

1) The Elder Ray readings : Bull Power rises from +13 to +86 Bear Power reduces from -43 to -6 indicating that the Bulls have gained in strength but are still to dislodge the Bears. For today, the Bulls need to overcome the levels of 7640 to maintain their upwards momentum whereas the Bears need to breach the levels of 7530 to maintain their downwards momentum.

2) The stochastics are showing a reversal after just touching the oversold zone top.

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 up move may continue. The MACD is showing initial signs of a reversal with the histogram rising in the negative. The ADX is also suggesting a rise in the Bullish momentum. The Parabolic SAR continues with its Buy signal with the SL now at 7482.

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

a) Around 7565 we will open fresh long positions with a SL of 7545 and a target of 7660. We will add to these long positions only above 7690.

b) Around 7670 we will open fresh short positions with a SL of 7690 and a target of 7570. We will add to these short positions only below 7545.

Happy Trading !!!

 

Buy calls on HIKAL GAEL BANCOINDIA & SURYAROSNI hit their targets on 30 Jun 2014

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