Weekly analysis : NIFTY SHOWS NO SIGNS OF ABATING - 18/04/2019

NIFTY SHOWS NO SIGNS OF ABATING - 18/04/2019.

 

SHARP INCREASE IN VOLATILITY.

 

The Volatility Index (India ViX @ 22) has seen a sharp increase of more than 10% in the past week. Despite such increase in Volatility, Nifty is showing no signs of abating. Nifty has given a bullish pattern breakout here and is likely to target 12211 as long as it remains above 11549. Mid-Cap and Small-Cap indices are showing good strength and are on the verge of delivering a strong bullish breakout. The frontline indices are testing the life-high levels and some sort of consolidation here, augurs well for the market. Till then any decline will be a good buying opportunity.

 


NIFTY SHOWS NO SIGNS OF ABATING - 18/04/2019.

 

SHARP INCREASE IN VOLATILITY.

 

The Volatility Index (India ViX @ 22) has seen a sharp increase of more than 10% in the past week. Despite such increase in Volatility, Nifty is showing no signs of abating. Nifty has given a bullish pattern breakout here and is likely to target 12211 as long as it remains above 11549. Mid-Cap and Small-Cap indices are showing good strength and are on the verge of delivering a strong bullish breakout. The frontline indices are testing the life-high levels and some sort of consolidation here, augurs well for the market. Till then any decline will be a good buying opportunity.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 38805, made a high of 39487, low of 38780 and closed the week at 39140. Thus it closed the week with a gain of 373 points. At the same time the Nifty opened the week at 11667, made a high of 11856, low of 11648 and closed the week at 11752. Thus the Nifty closed the week with a gain of 109 points.

 

On the daily charts, Nifty has made an Opening Black body Marubuzo which is completing a Bearish Belt hold pattern, whereas Sensex has completed a Dark Cloud Cover. Both are bearish reversal pattern on the daily time-frame. On the weekly charts, both the indices have formed a real white body candle which along with previous weeks candle has negated Bearish Doji formed two weeks back. Thus daily candlestick study is suggesting Bearishness whereas weekly pattern study indicates a Bullish bias.

 

This week both Sensex and Nifty completed a Bullish Flag pattern on Thursday. The target as per this pattern falls at Sensex 40873 and Nifty 12211 as long as Sensex remains above 38460 and Nifty above 11549. When the indices gave a Bullish breakout for the Trading Range of four months, a Bullish Cup & Handle pattern got completed. The target for the pattern falls at Sensex 41053 and Nifty 12232. Both Sensex and Nifty are in sideways consolidation and once that is over, both the indices will be headed for the above mentioned targets.

 

Market has strong Support at the higher bottoms of Sensex 38460 & 37667 and Nifty 11549 & 11311 followed by Bullish Gap between Sensex 37230-37106 and Nifty 11227-11180. Thus this Bullish Gap will act as strong Support zone. Also the Gap can be called as Measuring Gap. The target as per that falls at Sensex 39049 & Nifty 11822, which has already been achieved in last week.

 

This week, both the indices remained and closed above all the Moving Averages  viz. the long term average of 200dma (Sensex – 36498 and Nifty – 10983), the medium term average of 50dma (Sensex – 37401 and Nifty – 11230) and also the short term average of 20dma (Sensex – 38660 and Nifty – 11603). Thus the Trend in the long term, medium term and short term Timeframe remains Bullish.

 

MACD is in Sell mode whereas Price ROC is positive and in Buy mode. RSI (65) still suggests strong Bullish momentum. Stochastic Oscillator %K (80) is above %D and hence in Buy mode. ADX (37) suggests UpTrend still very strong. Directional Indicators are in Buy mode as +DI is above –DI. MFI (66) 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. Thus majority of Oscillators are suggesting a Bullish bias.

 

Volatility Index India ViX (22) has increased by more than 10% in past week. The formation suggests a target of 33 over next few weeks. Options data for May series indicate highest Call Open Interest is now at the strike of 12000 whereas the highest Put build-up is at the strike of 11000. Thus Options data suggests a wide trading range with resistance at 12000 & support at 11000.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

11434

11549

11644

11752

11856

11973

12089

Sensex

38089

38460

38808

39140

39487

39838

40226

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy ShreeCem

19693

19290

20299

20989

Buy UPL

934

921

969

999

Buy VinatiOrg

1767

1741

1809

1855

Buy CenturyTex

940

921

969

999

Buy IGL

327

321

336

346

 

WATCH OUT FOR:

 

UPL Rounding Bottom

 

 

 

 

 

 

 

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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