Nifty - 22 Jul 2014 - Bulls hold on without followup

Bulls hold on to the gains on the Nifty, but have to follow up soon to stave the Bears.

As discussed in yesterday's post, "Bulls should hold on", the Bulls did manage to keep the Nifty trading in the green, above its previous close of 7664, throughout the trading session. However, at the top end of the trading range, the Nifty saw some profit booking. The Nifty opened with a positive gap up of 38 points at 7702, then made a high of 7722 in the first half and hour of trade, before slipping to 7681 and then later in the day to 7674, before closing at 7684 with a gain of 20 points over its previous close. There was nothing for a day trader like us in yesterday's 50 point ranged day.

1) The Elder Ray readings : Bull Power rises from +86 to +111 Bear Power reduces from -3 to +63 indicating that the Bulls have now dislodged the Bears, but need to keep them away from their safe zone. For today, the Bulls need to overcome the levels of 7735 to maintain their upwards momentum whereas the Bears need to breach the levels of 7625 to regain their lost grounds.

2) The stochastics stay in the neutral zone and keep on 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 the rise may find resistance moving ahead. The MACD continues to attempt a Buy signal with the histogram rising yet remaining in the negative. The ADX is suggesting a rise in the Bullish momentum and a fall in the Bearish momentum. The Parabolic SAR continues with its Buy signal with the SL now shifted up to 7428.

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

a) Around 7620 we will open fresh long positions with a SL of 7595 and a target of 7740. We will add to these long positions only above 7770.

b) Around 7750 we will open fresh short positions with a SL of 7770 and a target of 7625. We will add to these short positions only below 7595.

Happy Trading !!! 

Buy calls on SANGAMIND LIBERTSHOE & BALAMINES hit their targets on 21 Jul 2014

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