Weekly analysis : PAUSE IN THE RALLY - 22/03/2019

PAUSE IN THE RALLY - 22/03/2019.

 

ANY DECLINE - A BUYING OPPORTUNITY.

 

After a stupendous rally of 1000 Nifty points in just a month, a Correction was the need of the hour. This Correction was bound to happen as majority of Oscillators were in Over-bought territory. After achieving an intermediate target of 11416, Nifty is now eyeing targets of 11644-11822. Strong Support exists at the Bullish Gap at Nifty 11227-11180 which is also a confluence zone. Thus any decline in the market will be treated as a Buying opportunity as the Trend across time-frames remains Upwards.

 

 


PAUSE IN THE RALLY - 22/03/2019.

 

ANY DECLINE - A BUYING OPPORTUNITY.

 

After a stupendous rally of 1000 Nifty points in just a month, a Correction was the need of the hour. This Correction was bound to happen as majority of Oscillators were in Over-bought territory. After achieving an intermediate target of 11416, Nifty is now eyeing targets of 11644-11822. Strong Support exists at the Bullish Gap at Nifty 11227-11180 which is also a confluence zone. Thus any decline in the market will be treated as a Buying opportunity as the Trend across time-frames remains Upwards.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 38132, made a high of 38564, low of 37952 and closed the week at 38164. Thus it closed the week with a gain of 140 points. At the same time the Nifty opened the week at 11473, made a high of 11572, low of 11412 and closed the week at 11456. Thus the Nifty closed the week with a gain of 30 points.

 

On the daily charts, both the indices have formed a Real Black body candle after a neutral Star-like formation. On the weekly charts, both Sensex and Nifty formed a small Black body Spinning Top. Thus daily as well as weekly candlestick study suggests a pause in the ongoing Upward Rally.

 

Bullish Breakout for the Trading Range of four months finally occurred in last week. Nifty has already achieved target of Nifty 11416. Now the Nifty is headed towards previous life-high levels (11760) and in the process also achieve a higher target of 11644.

 

Since the Market has seen a pause in the Upward Rally, one can expect a Retracement of the one way upward rise. Relevant Retracement levels are placed at Sensex 37312-36925-36539 and Nifty 11195-11079-10962.

 

Market has left behind a Bullish Gap between Sensex 37230-37106 and Nifty 11227-11180 which is also a confluence zone as it coincides with 38.2% Retracement level of 11195. Thus this Bullish Gap will act as strong Support zone. Also the Gap can be called as Measuring Gap. The target as per that will be Sensex 39049 & Nifty 11822.

 

This week, both the indices closed above all the Moving Averages viz. the long term average of 200dma (Sensex – 36204 and Nifty – 10905), the medium term average of 50dma (Sensex – 36485 and Nifty – 10946) and also the short term average of 20dma (Sensex – 36970 and Nifty – 11122). Thus the Trend in the long term, medium term and short term Timeframe remains Upwards.

 

MACD as well as Price ROC are in Buy mode. RSI (72) suggests Bullish momentum. Stochastic Oscillator %K (92) has just gone below %D and hence it is a fresh Sell signal. ADX (32) suggests UpTrend getting stronger. Directional Indicators are in Buy mode as +DI is above –DI. MFI (86) suggests Positive Money Flow. OBV continues to make higher top higher bottom formation in line with the Bullish trend. Bollinger Band continues with its Buy signal. Majority of Oscillators are suggesting a Bullish bias. But since Momentum Oscillators are into over-bought territory, one should not be surprised if the price declines a bit.

 

Options data for March series indicate highest Call Open Interest is now at the strike of 11600 whereas the highest Put build-up has now moved higher at the strike of 11000. Thus Options data suggests a trading range with resistance at 11600 & support at 11000.

 

INDEX LEVELS:


 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

11118

11227

11340

11456

11523

11639

11760

Sensex

36898

37230

37711

38164

38487

38838

39223

 

THIS WEEKS RECOMMENDATIONS:


STOCK

CMP

SL

Tgt-1

Tgt-2

Buy SRF

2454

2405

2529

2607

Buy JubFood

1430

1401

1475

1523

Buy Pidilite

1185

1163

1219

1255

Buy Hindalco

209

205

215

222

Buy OBC

106

103

111

116


WATCH OUT FOR:

 

SRF
 
Jubiliant Food
 
 
 
 

 

 

 

 

 

 

 


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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