Nifty and ADX...Is this is beginning or just another trap?
Nifty...undoubtedly biggest index of Indian Stock Market...is in upward rally since last 8th September, 2015. It hits low on 7539.5 on the same day but the day ended with a green candle on the daily chart. On that day, it closes at 7688.25 after touching high of 7720.9 in intraday. After that, the index never look back and started northward movement.
The index started up move and achieve high of 8055 on 18th September, 2015 and then it started down move. Before starting down move, the high achieved and low recorded on 8th September, has a difference of 515 was recorded. If a trader would have traded with technicals, the rally of at least 400 points might would have achieved.
The low of 7691,2 recorded on daily chart on 29th September, 2015 and first wave was completed with this low. The index started up move again after 29th September. Eventually the Supertrend crossed positive on the daily chart on 6th October, 2015 with EMA of 5 crossing EMA of 13 days and EMA of 16 days on 30th September and 5th October respectively.
The another important indicator MACD also crossed 0 line on 7th October and started journey in positive zone. MACD still remains in positive zone moving upward. This is a strong signal of Nifty moving northward direction. With few exceptions, the nifty shows overall upward movement or remains in sideways.
The important thing achieved on 23rd October, 2015. Rather it was awaited since other major indicators have shown positive move on the chart. The closing candle of the last trading session has also shown a positive crossover of ADX.
ADX has crossed -DI from below and started up move. Before crossing -DI, another positive crossover of +DI and -DI was recorded on 15th October, 2015. Similar kind of ADX positive crossover was recorded on 5th March, 2015 when Nifty was at 6328 level. All other major indicators like EMA, Supertrend, MACD were positive.
Considering all this signs, it can be said that the second round of Nifty bull run has already started and market may observe further up move and may recorded new all time high on the charts.
In the light of recent macro economics incidences, like no FED rate hike, 50 basis points reduction from RBI, reducing crude prices and local positive factors may give boost to the market. Positive results in Bihar assembly elections for BJP may also give further rise to the up move of market. Negative results of Bihar Assembly for BJP may halt rally of the market.
Now, Nifty and ADX...Is this is beginning or just another trap? Lets see for next 2-3 trading sessions for further strengthening of the up trend by watching ADX...
Happy Trading...Trend is Friend...
- Anand Singh Gaur
- Sunil Kothari