Nifty - 07 Jul 2014 - Bulls have the advantage

With a positive weekly close, the Bulls have retained the advantage. Need follow up.

As discussed on Friday, we saw a "Bullish end of week". The Nifty which opened with a mild gap up of 3 points, struggled initially to cross the levels of 7735 and dipped below 7700 to reach 7661 (just below our identified support zone) and there it found so much buying pressure, that the Nifty not only reached above 7700, but also crossed the day's highs to reach out to our identified target zone of 7755. The Nifty made a high of 7758 before closing at 7752 a gain of 37 points over its previous close. We took a trade on the long side and could book a profit of 100 points on that trade.

1) The Elder Ray readings : Bull Power reduces from +158 to +140 Bear Power rises from +111 to +43 indicating that though the Bulls have advantage, they are slipping and need to follow up. For today, the Bulls need to overcome the levels of 7780 to maintain their upwards momentum whereas the Bears need to breach the levels of 7640 to regain their lost grounds.

2) The stochastics are now well and deep into the overbought zone.

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 decreased with the rise in the Nifty indicating that the up move may find resistance ahead. The MACD is about to give out a Buy signal but has not given it out as yet. The ADX is suggesting a rise in the Bearish momentum and a fall in the Bullish momentum. The Parabolic SAR continues with its Buy signal with the SL now brought up to 7568.

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

a) Around 7700 we will open fresh long positions with a SL of 7675 and a target of 7785. We will add to these long positions only above 7825.

b) Around 7795 we will open fresh short positions with a SL of 7825 and a target of 7715. We will add to these short positions only below 7675.

Happy Trading !!! 

Buy calls on TEXINFRA & ARIES hit their targets on 04 Jul 2014

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