Weekly analysis : TESTING THE UPPER BOUNDARY OF TRADING RANGE - 15/06/2018.

TESTING THE UPPER BOUNDARY OF TRADING RANGE - 15/06/2018.

 

NIFTY SUPPORT AT 10722-10698.

 

Volatility made a comeback this week when Nifty tested the upper end of its short term trading range between 10900-10550. Nifty is likely to find support at 10722-10698, a break of which can lead Nifty to test the lower end of the trading range. An expansion beyond the lower end will lead the Nifty to test the higher bottom at 10417. It is seen as very strong support as there is a strong confluence of Retracement levels along with the 200dma. A break on the upside of the trading range, will lead the Nifty to test the previous top of 11171 and beyond. Mid-cap 50 (5026) as expected continued its relief rally; a close above confluence zone of 5134-5145 will be the first signal that a bottom formation might be in place.

 


TESTING THE UPPER BOUNDARY OF TRADING RANGE - 15/06/2018.

 

NIFTY SUPPORT AT 10722-10698.

 

Volatility made a comeback this week when Nifty tested the upper end of its short term trading range between 10900-10550. Nifty is likely to find support at 10722-10698, a break of which can lead Nifty to test the lower end of the trading range. An expansion beyond the lower end will lead the Nifty to test the higher bottom at 10417. It is seen as very strong support as there is a strong confluence of Retracement levels along with the 200dma. A break on the upside of the trading range, will lead the Nifty to test the previous top of 11171 and beyond. Mid-cap 50 (5026) as expected continued its relief rally; a close above confluence zone of 5134-5145 will be the first signal that a bottom formation might be in place.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 35472, made a high of 35877, low of 35419 and closed the week at 35622. Thus it closed the week with a gain of 179 points. At the same time the Nifty opened the week at 10781, made a high of 10893, low of 10755 and closed the week at 10817. Thus the Nifty closed the week with a gain of 50 points.

 

On the daily charts, Nifty has formed a small white body candle with a long lower shadow indicating buying at lower levels, whereas Sensex has formed a similar formation with a small black body. Nifty has formed a Bullish Harami whereas Sensex has formed a Homing Pigeon, both of which can be considered a Bullish Reversal once we get a confirmation. On the weekly charts, once again for the fourth week running, both the indices have formed a small white body but which is in the trading range of the big black candle formed four weeks back. Thus daily charts are hinting at a bullish bias in the near term whereas weekly charts remain undecided.

 

Both the indices have left behind a Bullish Gap last week between Sensex 35278-35230 and Nifty 10722-10698. This Gap will act as Support in case of any drop in the indices.

 

Few weeks back, both the indices completed a Bullish Rounding Bottom pattern on the daily charts. It is a Bullish pattern and the target as per that falls at Sensex 36737 and Nifty 11311.

 

Mid-Cap 50 Index (5026) continued with recovery and touched a high of 5098 for the week. It will face strong Resistance Zone at 5134-5145 which is due to the confluence of 200dma and Retracement levels. A Trend Reversal will occur only if Mid-Cap 50 closes above 5365.

 

Both the indices had a Weekly Bearish Gap between Sensex 34874-35006 and Nifty 10702-10736. This Gap was aided by 61.8% Retracement of the current fall (Sensex – 34931 and Nifty 10706), which is a Reversal level. This week, both the indices have closed not only above the Weekly Bearish Gap but also above their Reversal level of Sensex 34931 and Nifty 10706. Thus if it remains above the Reversal zone, then the indices will target the previous top.

 

This week, both the indices remained above the short term average of 20dma (Sensex – 35145 and Nifty 10676), medium term average of 50dma (Sensex – 34898 and Nifty – 10637) and even the long term average of 200dma (Sensex – 33740 and Nifty – 10399). Thus the trend in short term, medium term as well as in the long term timeframe continues to remain Upwards.

 

MACD and Price ROC are both positive and in Buy mode. RSI (59) suggests bullish momentum. Stochastic Oscillator %K (81) is below %D and hence in Sell mode. ADX has fallen to 17, suggesting a sideways consolidation and no strength in trend. Directional Indicators are in Buy mode as +DI is above –DI. MFI (53) suggests Positive Money Flow. OBV continues in sideways mode. Thus Oscillators suggest a bullish bias.

 

Options data for June series indicate highest Call Open Interest is at the strike of 11000 whereas the highest Put build-up is at the strike of 10700. Thus Options data suggests a trading range with resistance at 11000 & support at 10700.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

10550

10631

10722

10817

10929

11009

11117

Sensex

34302

34874

35278

35622

35993

36443

36778

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy PageInd

26613

26000

27563

28338

Buy JubFood

2765

2715

2841

2919

Buy Infosys

1281

1256

1319

1361

Buy GlenmarkPh

586

574

605

625

Buy STAR

392

384

405

419


WATCH OUT FOR:

 

INFOSYS

 

 

 

 

 

 

 

 

Disclaimer : The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are solely responsible for their actions. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness.

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