Nifty - 21 Jul 2014 - Bulls should hold on

Nifty sets up stage for a fast up move. Bulls need to hold on to gains for now.

On Friday, we had suggested that the "Bullish trend may assert" itself, and despite weak global cues, the Nifty opened with just a 10 point negative gap down at 7630 and tested supports at 7595 as expected. From there on, the Nifty regained its initial losses and in the afternoon soared to touch new intraday high of 7685 before closing at 7664 with a gain of 23 points over its previous close. We traded on the long side and could book a profit of 40 points on that trade.

1) The Elder Ray readings : Bull Power rises from +68 to +87 Bear Power also rises from +25 to -3 indicating that the Bears are still in the reckon and that the Bulls need some more work to do. For today, the Bulls need to overcome the levels of 7700 to maintain their upwards momentum whereas the Bears need to breach the levels of 7590 to maintain their downwards momentum.

2) The stochastics are right in the center of the neutral zone and are pointing upwards.

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 resistance may be found soon. The MACD continues in its attempt to indicate a Buy signal with the histogram rising but remaining in the negative. The ADX is suggesting a stagnation of the Bullish momentum but is still favoring the Bulls. The Parabolic SAR has now turned into a Buy signal with the initial SL kept at 7422.

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

a) Around 7605 we will open fresh long positions with a SL of 7580 and a target of 7720. We will add to these long positions only above 7750.

b) Around 7730 we will open fresh short positions with a SL of 7750 and a target of 7615. We will add to these short positions only below 7580.

Happy Trading !!!

Buy calls on AXIS-IT&T TATAMETALI HEIDELBERG & PAPERPROD hit their targets on 18 Jul 2014

Also visit Just Nifty and the Nifty Range blogs.


For cash market recommendations see our Daily Pre Market calls on NSE