Weekly analysis : WHERE DO WE GO NOW? - 15/02/2019

WHERE DO WE GO NOW? - 15/02/2019.

 

TREND TURNS BEARISH.

 

Last week the Market gave a Trading Range breakout and seemed to be headed higher, but that was not to be. After registering a high of 11118 last week, the Nifty fell by 500 points in next six days. Nifty retested and rebounded from just above the previous intermittent bottom of 10583. So once again the Nifty has entered into a Trading Range and this time it is wider from 10583 to 11118. Last weeks fall ensured that the Nifty closed below the relevant Moving Averages and hence the Trend has turned Bearish. Hence every rise from hereon will be treated as a selling opportunity. Only a close above 11089 will ensure Nifty a safe passage towards higher targets of 11416-11644. A break below 10583 will lead the Nifty down to Support level of 10333 and then towards the dreaded neckline of Weekly Bearish Head & Shoulders at 10050.

 


WHERE DO WE GO NOW? - 15/02/2019.

 

TREND TURNS BEARISH.

 

Last week the Market gave a Trading Range breakout and seemed to be headed higher, but that was not to be. After registering a high of 11118 last week, the Nifty fell by 500 points in next six days. Nifty retested and rebounded from just above the previous intermittent bottom of 10583. So once again the Nifty has entered into a Trading Range and this time it is wider from 10583 to 11118. Last weeks fall ensured that the Nifty closed below the relevant Moving Averages and hence the Trend has turned Bearish. Hence every rise from hereon will be treated as a selling opportunity. Only a close above 11089 will ensure Nifty a safe passage towards higher targets of 11416-11644. A break below 10583 will lead the Nifty down to Support level of 10333 and then towards the dreaded neckline of Weekly Bearish Head & Shoulders at 10050.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 36585, made a high of 36588, low of 35510 and closed the week at 35808. Thus it closed the week with a loss of 738 points. At the same time the Nifty opened the week at 10930, made a high of 10930, low of 10620 and closed the week at 10724. Thus the Nifty closed the week with a loss of 219 points.

 

On the daily charts, both the indices have formed a Black body candle with a long lower shadow just falling short of being called a Hammer. On the weekly charts, both Sensex and Nifty have formed an Opening Black body Marubuzo. Thus more than daily, weekly candlestick study indicates bearishness.

 

After getting a Trading Range breakout last week, both the indices fell and seems have once again entered a wider Trading Range between Sensex 37172-35010 and Nifty 11118-10534. After last weeks fall, the Nifty is now headed lower and probability of breaking the lower end seems higher. A break below Nifty 10583 will retest the Support level of 10333 and then further go down to test the Head &Shoulder neckline of 10050.

 

Interestingly all the significant Moving Averages (20dma, 50dma & 200dma) have converged into a narrow Confluence Zone between Sensex 36008-36243 and Nifty 10816-10860. This Zone will act as Resistance Zone and every rise into this zone will be taken as a Selling opportunity.

 

The Correction of the current upward Retracement is at Sensex 35300-34922-34538 and Nifty 10610-10494-10379. A break below Nifty 10379, will see the intermediate Correction resuming and the intermediate Correction levels are placed at Sensex 33920-32354-30788 and Nifty 10283-9827-9371. Higher degree Correction levels are placed at Sensex 32688-30742-28796 and Nifty 9875-9293-8710. Thus we have two confluence zones which will act as Support Zones. First Confluence Support Zone is between Sensex 32688-32354 and Nifty 9875-9827. Second Confluence Support Zone falls between Sensex 30788-30724 and Nifty 9371-9293.

 

This week, both the indices closed below all the Moving Averages viz. the long term average of 200dma (Sensex – 36008 and Nifty – 10860), the medium term average of 50dma (Sensex – 36070 and Nifty – 10816) and also the short term average of 20dma (Sensex – 36243 and Nifty – 10847). Thus the Trend in long term, medium term and short term has turned Bearish.

 

MACD is in Sell mode. RSI (42) suggests Bearish momentum. Stochastic Oscillator %K (32) is below %D and hence in Sell mode. ADX (13) suggests a further sideways consolidation with no clear trend. Directional Indicators are in Sell mode as +DI has below –DI. MFI (46) suggests Negative Money Flow. OBV is still making higher top higher bottom. Buy signal in Bollinger Band has got negated. Thus majority of Oscillators are suggesting a Bearish bias.

 

Options data for February series indicate highest Call Open Interest is at the strike of 10800 whereas the highest Put build-up is at the strike of 10600. Thus Options data suggests a narrow trading range with resistance at 10800 & support at 10600.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

10440

10534

10620

10724

10821

10941

11043

Sensex

34672

35010

35375

35808

36123

36554

36898

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell HDFC

1875

1903

1833

1790

Sell CoLPaL

1234

1259

1196

1167

Sell Biocon

615

627

597

578

Sell Siemens

962

982

932

901

Sell BergerPaints

293

299

284

274

 

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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