NIFTY breaks resistance and range

In a strong move and still super strong move towards closing, NIFTY breaks the range high decisively on the Daily charts. 25 stocks of the NIFTY component list are trending today, which is 50%. 8 stocks show strength towards bullishness. 16 of them are having both EMA and MACD histogram in the opposite direction, this is the caution now. 1 stock is having a strong bearish strength. The equation is tilted on the bullish side more better than the previous day's position. Bullishness is likely to continue at least in the next session. MACD histogram has a new peak from the current move which adds to bullish strength.

Where are the averages positioned today? Averages are tightly knit between each other, while the price is just close to hitting the next resistance of 5220. There can be a cross over and the averages may open up into a bullish trend, but, there are several resistance and congestion zones going ahead. With a clear bearish divergence on the Weekly charts, we suspect this bullish move to fake out and turn into a pretty strong bear trend. These are probabilities on the longer time scale.

Hourly charts are strong on the MACD lines, which have reached a new peak, a multi month high which was not reached for the past few months. While this shows great strength on the bullish side, the MACD histogram has a bearish divergence and the pattern shows continuation of the up moves on a slow pace. Even if there are strong moves in any bar, it is likely to rest on the next resistance.

The present bullish trend on the hourly has not given any opportunity for the swing trades as it kept moving parallel to the averages without retracing to value zone. Our trend trade which got filled at 5035 on 10^th June is open and doing well with a 170 points gain so far. We need to give back some of the gains to stay put in the running trend and capture any further bullish moves. The value zone on the closing bar is at 5112-5148, which indicates that our position has locked quite a good amount of profit at these levels. A close below the value zone and breach of low will only negate our bullish trade and the change direction to bearishness.

Traders on the trend position stay put with the holding, as entry stop has gone pretty low, any knee jerk reactions in the market will only need a close watch on the other hand a smooth move like we had today will lead to further gains on this index position.

Happy trading in a strong bullish market folks.