Archives : MARKET READY TO RUN - 09/04/2010.
MARKET READY TO RUN – 09/04/2010.
  • CONSOLIDATION OVER.
  • TECHNICALLY SPEAKING.
  • INDEX LEVELS:
  • LAST WEEKS RECOMMENDATIONS:
  • THIS WEEKS RECOMMENDATIONS:
  • WATCH OUT FOR:

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MARKET READY TO RUN – 09/04/2010.
 
CONSOLIDATION OVER.
Market roared back on Monday as it went past the resistances and signalled that finally it is out of the trading range when it closed above Sensex 17800 and Nifty 5310. Market was not able to break the resistance level of Sensex 17790 and Nifty 5310 despite three attempts. But now it has given the breakout and one can expect strong momentum on the way up. The consolidation is now over and the market is now ready to run.
 

TECHNICALLY SPEAKING. 

The Sensex opened the week at 17693, made a high of 18047, a low of 17679 and closed the week at 17933. The Sensex closed the week with strong gain of 241 points. Similarly Nifty opened the week at 5291, made a high of 5399, a low of 5290 and closed the week at 5361. The Nifty too closed with the week with a strong gain of 71 points.  As a result both Sensex and Nifty have formed a Bullish Opening white Marubuzo on the weekly charts and even on the daily charts on Friday. If we consider the last two days candle on the daily charts, both the indices have formed Bullish Harami Reversal pattern. 

The momentum oscillators like the ROC, MACD and OBV continue to be in their Buy mode. Oscillators like the RSI, the Stochastic Oscillator and MFI, which were overbought, have now moved lower. ADX is strong at 39 indicating that the current trend is strong, while the Directional Indicators continue with their Buy signal. 

The Sensex and Nifty are trading well above their 61.8% retracement of the entire fall i.e. Sensex from 21206-7697 and Nifty from 6357-2252. The next Fibonacci retracement level 78.6% which will provide some resistance will be at Sensex 18315 and Nifty 5478. Hence one can expect some sort of resistance around those levels. 

When Sensex closed this week above 17799, it managed a weekly close above the weekly Trendline joining previous highs of 17735-17790. Similarly Nifty too managed a breakout when it closed the week above the weekly Trendline joining 5298-5310. As a result the market will gear up to move higher and the test the upper resistance levels. The first will the supply line joining the previous highs (Sensex 17493-17790 and Nifty 5181-5310) and that falls at Sensex 18148 and Nifty 5468, which is very close the 78.6% retracement of the entire fall (Sensex 18315 and Nifty 5478). Thus there is a confluence of resistances which forms a strong resistance band between Sensex 18148-18315 and Nifty 5468-5478. Once both the indices close above their resistance zone, Sensex will head towards 18895-19929 and Nifty 5676-5945.

Sensex and Nifty have made higher bottoms at 17337 and 5187 respectively as compared to the previous bottom of Sensex 17061 and Nifty 5101. Two weeks before Sensex bounced back from 17488 and Nifty 5235, thus confirming a support zone between Sensex 17488-17337 and Nifty 5235-5187. This support zone should not be breached if the short term trend is to stay up. From the medium term point of view, it is necessary that the Sensex holds the support zone of 17061-17027 and Nifty 5101-5092. 
Sensex has Trendline Resistance at 18148 and Trendline Support at 17799, while Nifty has strong Trendline Support at 5312 and Trendline Resistance at 5468. 
Nifty OI PCR is increasing and is on the higher side at 1.71, which indicates that the market is highly optimistic. Strong Put writing is seen at 5300 and 5200, which should act as strong support in case of a fall. Open Interest for 5400 Call has shed open interest which indicates the Call writers are losing confidence.
For the week ahead, Sensex will find Support at 17782-17600-17488 and will find Resistance at 18047-18182-18314. For the week ahead, Nifty will find Support at 5322-5290-5235 and will find Resistance at 5413-5468-5509.
 
INDEX LEVELS: 
 S3S2S1CLOSER1R2R3
Nifty5235529053225361541354685509
Sensex17488176001778217933180471818218314
 
LAST WEEKS RECOMMENDATIONS:
We hit Bulls eye as all our targets were achieved with ease. But the star performer was Bhushan Steel which went up by almost Rs.100, which translates into a profit of over Rs. 50,000/=.  
STOCKReco. PriceTgt ReachedLot SizeProfit
Buy HDFC278728242849150Rs.9,300
Buy Titan187219021930206Rs.11,948
Buy Bhushan174418211844500Rs.50,000
Buy NagCons1671801852000Rs.36,000
Buy Havells622644658500Rs.18,000
    TotalRs.1,25,248
  
THIS WEEKS RECOMMENDATIONS: 
 
STOCKCMPSLTgt-1Tgt-2
Buy EssarOil151147157163
Buy GSPL939198103
Buy TataMotor809798824841
Buy AxisBank1183117212061239
Buy Bhel2563254126022642
  
WATCH OUT FOR: 
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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