Archives : MARKET IGNORING GOOD NEWS - 10/10/2009

MARKET IGNORING GOOD NEWS - 09/10/2009.  

Traders always remember the October month with lot of fright as the month of October is usually set aside for a correction. Rewind your memory to October 2008 when the market saw a steep decline and the Sensex made a low of 7697 and Nifty-2252 on 31st October 2008. Gann, one of the great technical analysts, always used to mark these dates as anniversary dates and used to expect events of big magnitudes to occur on such dates. So beware.

 


MARKET IGNORING GOOD NEWS - 09/10/2009.  

Traders always remember the October month with lot of fright as the month of October is usually set aside for a correction. Rewind your memory to October 2008 when the market saw a steep decline and the Sensex made a low of 7697 and Nifty-2252 on 31st October 2008. Gann, one of the great technical analysts, always used to mark these dates as anniversary dates and used to expect events of big magnitudes to occur on such dates. So beware.

RIL BONUS, INFY SURPRISE IGNORED. 

Until now the market used to discount the bad news like poor monsoon or poor economic data and used to move further up, but now the point of concern is now it is ignoring the good news which can be seen by the way it ignored the liberal bonus of 1:1 given by RIL and also strong result given by Infosys. This certainly does not augur well for the bulls and by the look of it, the market is asking for some rest. 

SENSEX. 

The Sensex opened at 17062, made a high of 17120, made a low of 16606 and closed the week at 16642. The weekly loss was 492 points.

 

The Sensex completed a Bearish Evening Star reversal pattern on Monday on daily charts. Inspite of bounce back being witnessed on Tuesday and Wednesday, Sensex could not sustain and went lower. The bearishness is clearly visible on the weekly charts in the form of Big Black Candle. The Bearish pattern on the Sensex will stand negated if the Sensex manages a close above 17120.

 

The Sensex has closed just above the Trendline support which is falling at 16506. This Trendline has given consistent support to the Sensex. A breach of this Trendline on closing basis will see start of a correction.  

 

If we consider the immediate rise from 14864-17195 then the correction levels are 16236-15939-15643. If we consider the larger rise from 13219-17195 then the correction levels are 15676-15207-14738.

 

The Sensex has formed a small Bearish Head & Shoulder pattern and the target for which is 16011. 

 

The momentum indicator ROC has moved in the negative territory and has given a sell signal. The MACD has already given a sell signal and continues to do so. The RSI (54) is moving lower, but the RSI pattern has already indicated a breach of a Trendline joining the lows and hence could be an advance indication of pending retracement.

 

For the week ahead, Sensex will face resistance at 16943-17294-17598 and support will be at 16494-16119-15939.

 

NIFTY. 

 

The Nifty opened at 5076 made a high of 5077, made a low of 4921 and closed the week at 4945. The weekly loss was 138 points.

 

The Nifty completed a Bearish Evening Doji star reversal pattern on Monday on daily charts. Inspite bounce back being witnessed on Tuesday and Wednesday, Nifty could not sustain and went lower. The bearishness is clearly visible on the weekly charts in the form of Opening Black Marubuzo. The Bearish pattern on the Nifty which stand negated if the Nifty manages a close above 5077.

 

The Nifty has closed just above the Trendline support which is falling at 4917. This Trendline has given consistent support to the Nifty. A breach of this Trendline on closing basis, will see start of a correction.  

 

If we consider the immediate rise from 4353-5110 then the correction levels are 4821-4731-4642. If we consider the larger rise from 3918-5110 then the correction levels are 4655-4514-4373.

 

The Nifty has formed a Bearish Head & Shoulder pattern but a breakout will be confirmed only if Nifty closes below 4931; then the target could be 4725. 

 

The momentum indicator ROC has moved in the negative territory and has given a sell signal. The MACD has already given a sell signal and continues to do so. The RSI (54) is moving lower, but the RSI pattern has already indicated a breach of a Trendline joining the lows and hence could be a advance indication of pending retracement.

 

The OI PCR has corrected and is now at 1.27. Strong Call writing is visible at the strikes of 5100 and 5000. It means that the market will find difficulty in crossing the level of 5100. 4900 and 4700 Puts have added lot of Open Interest which indicates some support for the Nifty at those levels.

 

For the week ahead Nifty will face resistance at 5036-5110-5167 and support will be at 4904-4786-4725. 

 

INDEX LEVELS: 

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

4725

4786

4904

4945

5036

5110

5167

Sensex

15939

16119

16494

16642

16943

17294

17598

 

 

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy IDFC

154

162

158

2950

Rs.11,800

Buy JSW

853

881

922

412

Rs.28,428

Buy SRF

188

199

195

3000

Rs.21,000

Buy Axis

1009

1025

1028

450

Rs.8,550

Buy ABAN

1650

1690

1679

400

Rs.11,600

Profit

Rs.81,378

THIS WEEK’S RECOMMENDATIONS: 

 

 

 

PAIR NO.

STOCK

CMP

SL

TGT-1

TGT-2

1

Buy

IDBI

130

126

138

145

Sell

Patni Comp.

395

410

369

349

2

Buy

Thermax

580

563

602

630

Sell

Tata Motor

545

575

528

496

3

Buy

OFSS

2097

2049

2170

2243

Sell

SBI

2067

2084

2027

1992

  

IDBI

IDBI

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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