Archives : JUST LIKE INDIA - 01/04/2011.

JUST LIKE INDIA – 01/04/2011.

The market continued to move higher after the formation of Bullish Continuation pattern called the Rising Three method. The challenges posed this week in the form of the expiry, 200dma, and other critical resistance levels like the Rising Channel Top were taken out easily. The market went from strength to strength without even pausing for breath. The bulls were in no mood to let go even an inch to the bears. The sparkling form of the bulls resembled the form of the Indian cricket team. Just as India steam rolled their opponents into submission, the bulls knocked out bears day in and day out for the entire duration of last week. After a long time there was a smile on the face of the market participants as the bulls saluted the Indian cricket team.

OVERHEAD SUPPLY LINE AT NIFTY - 5935.

Just as the market managed to conquer the coveted landmark of 200dma, the signs of the market turning bullish from the long term perspective became evident. It was visible in the kind of FII inflows seen over the past two weeks, which carried the market higher. Now the indices will have to deal with and overcome strong overhead supply line (Sensex – 19937 and Nifty – 5935), before they can take a potshot at the previous top.


JUST LIKE INDIA – 01/04/2011. 

The market continued to move higher after the formation of Bullish Continuation pattern called the Rising Three method. The challenges posed this week in the form of the expiry, 200dma, and other critical resistance levels like the Rising Channel Top were taken out easily. The market went from strength to strength without even pausing for breath. The bulls were in no mood to let go even an inch to the bears. The sparkling form of the bulls resembled the form of the Indian cricket team. Just as India steam rolled their opponents into submission, the bulls knocked out bears day in and day out for the entire duration of last week. After a long time there was a smile on the face of the market participants as the bulls saluted the Indian cricket team.

OVERHEAD SUPPLY LINE AT NIFTY - 5935.

Just as the market managed to conquer the coveted landmark of 200dma, the signs of the market turning bullish from the long term perspective became evident. It was visible in the kind of FII inflows seen over the past two weeks, which carried the market higher. Now the indices will have to deal with and overcome strong overhead supply line (Sensex – 19937 and Nifty – 5935), before they can take a potshot at the previous top.

TECHNICALLY SPEAKING. 

The Sensex opened the week at 18799 made a high of 19575, a low of 18799 and closed the week at 19420. The Sensex made a strong gain of 605 points on a weekly basis. Similarly Nifty opened the week at 5645, made a high of 5872, a low of 5643 and closed the week at 5826. The Nifty too closed with a strong gain of 172 points on a weekly basis.

On the daily charts both the indices have formed a small black body candle. Since the trading range for Friday was within the trading range for Thursday, we can call this as an Inside day and hence we can safely assume this to be a neutral formation. On the weekly charts there is Opening White Body Marubuzo which is a Bullish formation. It was formed after a Bullish Continuation pattern called Rising Three Methods was completed last week. Thus it simply suggests that the bullishness should continue.

After conquering 50dma two weeks back, it was the turn of the 200dma this week. The market breached the 200dma (Sensex – 18994 and Nifty – 5701) with great ease at the beginning of the week. This highlights the fact about the strong bullish undercurrent prevalent in the market. Both the Sensex and Nifty overcame the hurdle of 200dma and closed well above that. This has changed the outlook for the long term timeframe. Long term outlook has turned bullish and will remain so until both the indices stay above the 200dma. The market is well above the 50dma (Sensex – 18355 and Nifty – 5503) and 20dma (Sensex – 18502 and Nifty – 5553) and as a result both short and medium term trends are bullish.

The market recorded solid gains for the past week and in the process overcame strong Resistance zones mentioned in last weeks article. Strong Resistance was expected at Sensex zone of 19340-19377 and Nifty 5798-5801. Not only the market conquered these Resistance zones but also managed a firm close above those levels. In the coming week, the long term trend reversal will occur only when the Sensex crosses and closes above 61.8% of the entire fall of Sensex from 21108-17295 and Nifty from 6338-5177. These levels are 19651 for the Sensex and 5894 for the Nifty.

In the current rally, both Sensex and Nifty have left behind two upward gaps on the daily charts. The first gap can be termed as a Bullish Breakaway gap and the second gap as Runaway or a Measuring Gap. Measuring Gap helps in setting a minimum target for the rally and that target for the Sensex falls at 19558 and Nifty 5912. Sensex has achieved the target but the Nifty is very close to achieving that target.

The targets for Symmetrical Triangle bullish breakout (Sensex – 19489 and Nifty – 5853) given two weeks before, were achieved this week. Both the indices were moving in a Rising Channel formation, with the Channel Top acting as a resistance. This week the Channel Top was taken out and we had a Bullish Breakout for Rising Channel formation. The targets for Rising Channel pattern breakout will be Sensex 20340 and Nifty 6095.

All the oscillators are signaling a Buy except for short term momentum oscillator like the Stochastic Oscillator. Both MACD and ROC continue with their Buy signals, while being in positive territory. RSI continues with its Buy signal while moving higher at 67. Bollinger Band too continues in its Buy mode. So does the Money Flow and OBV. MFI has moved higher to 76, which confirms that the money is flowing in the market. Stochastic oscillator has signaled a Sell as %K has cut %D from above and at the same time %K and %D are both overbought. The Directional Indicators too, are in Buy mode as +DI continues to be above –DI. The ADX at 20 suggests that the uptrend is slowly gaining strength.

Nifty O.I. PCR is at 1.28. Strong Put buildup is seen at the strike of 5700 which suggests that support can be expected around that level. At the same time, highest Call writing is seen at the strike of 6000. Thus the Nifty is likely to face strong resistance around 6000.

The Trendline Resistance for the Sensex is at 19937. The Trendline Support is at 19141.

The Trendline Resistance for the Nifty is at 5935. The Trendline Support is at 5729.

For the week ahead, Sensex will find Support at 19167-18954-18736 and will find Resistance at 19694-19981-20267.

For the week ahead, Nifty will find Support at 5758-5690-5624 and will find Resistance at 5901-5985-6073.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5624

5690

5758

5826

5901

5985

6073

Sensex

18736

18954

19167

19420

19694

19981

20267

LAST WEEKS RECOMMENDATIONS:

Bulls Eye!!! All our recommendations reached their targets and more. Three cheers for our readers. LiC Hsg was the star performer for the last week as it went up by almost 15%; followed by Financial Tech which also did quite well by moving up by almost 11%. 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy JindalSW

944

1009

1040

125

Rs.12,000

Buy FinTech

823

870

911

250

Rs.22,000

Buy BoB

927

964

974

250

Rs.11,750

Buy LiCHsg

205

222

235

1250

Rs.37,500

Buy BRFL

264

272

274

1000

Rs.10,000

Total

Rs.93,250

THIS WEEKS RECOMMENDATIONS:  

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy NMDC

295

288

304

314

Buy Orchid

316

309

326

338

Buy JsWSt

949

936

967

986

Buy LiCHsg

233

227

243

254

Buy Mercator

40

39

42

45

WATCH OUT FOR:  

NMDC

 

Orchid Chem

 

JSW Steel

 

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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