Weekly analysis : NOTHING MUCH; BUT DOWNWARD DRIFT CONTINUES - 21/06/2019

NOTHING MUCH; BUT DOWNWARD DRIFT CONTINUES - 21/06/2019.

 

BIAS REMAINS BEARISH.

 

Nifty still remains in a Trading Range but the downward drift continues. On a weekly basis, Nifty is down by around 100 points but if one considers the intraday scenario then the Nifty movement on each day is at least more than double. Every attempt at moving higher is thwarted by strong Selling and as a result, the Short Term Trend has turned Bearish. Despite the inability of the Nifty to sustain at higher levels, we still remain in Trading Range between 12103-11614. This week successfully tested the lower boundary on practically every day except on Friday. A Bullish follow-up was expected on Friday, but a lack of it raises questions about the ability and willingness to move higher. A downward break of the Trading Range will lead the Nifty to test the strong weekly Support in the form of Bullish Gap between 11591-11426.

 


NOTHING MUCH; BUT DOWNWARD DRIFT CONTINUES - 21/06/2019.

 

BIAS REMAINS BEARISH.

 

Nifty still remains in a Trading Range but the downward drift continues. On a weekly basis, Nifty is down by around 100 points but if one considers the intraday scenario then the Nifty movement on each day is at least more than double. Every attempt at moving higher is thwarted by strong Selling and as a result, the Short Term Trend has turned Bearish. Despite the inability of the Nifty to sustain at higher levels, we still remain in Trading Range between 12103-11614. This week successfully tested the lower boundary on practically every day except on Friday. A Bullish follow-up was expected on Friday, but a lack of it raises questions about the ability and willingness to move higher. A downward break of the Trading Range will lead the Nifty to test the strong weekly Support in the form of Bullish Gap between 11591-11426.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 39514, made a high of 39638, low of 38870 and closed the week at 39194. Thus it closed the week with a loss of 258 points. At the same time the Nifty opened the week at 11844, made a high of 11844, low of 11625 and closed the week at 11724. Thus the Nifty closed the week with a loss of 99 points.

 

On the daily charts, both Sensex and Nifty have formed a real Black body candle which when combined with Thursday’s candle, forms a Bearish Harami, but it has little significance as it has formed in downtrend. On the weekly charts, both the indices have again formed a small Black body candle. Interestingly, last four weeks candle bodies lie within the trading range of the candle formed five weeks back. Technically last four weeks can be termed as ‘Rest’ weeks. Thus Candlestick pattern study suggests a volatile week but with a slight Bearish bias.

 

Both the indices are moving in a Trading Range between Sensex 40312-38651 & Nifty 12103-11614. The lower end of the Trading Range was successfully tested and defended four times this week. In case of a break on the downside, the indices will move towards testing of the critical Weekly Bullish Gap. A bullish breakout will see Sensex reaching Cup & Handle target of 41053 and Nifty 12232.

 

Both the indices have left behind a Bullish Breakaway Gap not only on the daily time-frame but also on weekly time-frame. This Bullish Gap between Sensex 38570-38001 and Nifty 11591-11426 will now act as strong Support Zone.

 

Both the indices had completed a Bullish Cup & Handle pattern in March 2019 and now they are heading towards their target of Sensex 41053 and Nifty 12232. Also a Rounding Bottom got completed, which has a target of Sensex 44687 & Nifty 13516.

 

Both the indices have closed this week below the short term average of 20dma (Sensex – 39600 and Nifty – 11869). Both the indices continue to remain above the medium term average of 50dma (Sensex – 38935 and Nifty 11687) as well as the long term average of 200dma (Sensex – 36922 and Nifty – 11095). Thus the Trend in the medium term and long term Timeframe continues to be Bullish, whereas the Trend in the short term Timeframe has turned Bearish.

 

MACD and Price ROC are both in Sell mode. RSI (48) suggests Bearish momentum. Stochastic Oscillator %K (25) is above %D and hence in Buy mode. ADX (26) suggests Uptrend losing strength. Directional Indicators are still in Buy mode as +DI is above –DI. MFI (45) suggests Negative Money Flow. Thus Oscillators are suggesting a bearish bias.

 

Options data for July series indicate highest Call Open Interest is at 12000 and the highest Put build-up is still at the strike of 11000. Thus Options data suggests a trading range with resistance at 12000 and strong support at 11000.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

11395

11484

11625

11724

11843

11944

12041

Sensex

38001

38389

38719

39194

39638

40066

40403

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy SRF

3021

2951

3127

3238

Buy ConCorp

553

542

571

589

Buy SBI

349

341

362

376

Buy TataGlobaL

261

255

270

280

Buy BHEL

71

69

75

79

 

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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