Archives : BULLISH HARAMI ON WEEKLY CHARTS - 24/06/2011.

BULLISH HARAMI ON WEEKLY CHARTS – 24/06/2011.

MARKET SURVIVES BEARISH H & S BREAKOUT.

In a surprising counter attack by the Bulls on Friday, the market went from strength to strength and registered a strong gain of over 500 points. In the process the market not only reversed the short term trend when it closed above the short term average of 20dma, but also more importantly closed above the neckline of the weekly Bearish Head & Shoulders pattern. As a result, there is no weekly closing below the neckline and the weekly Head and Shoulders pattern is yet to give a bearish breakout.  Interestingly both the indices successfully tested their previous bottom of Sensex 17295 and Nifty 5177 and registered a higher bottom of Sensex 17314 and Nifty 5195.

 

 

 

  

BULLISH HARAMI ON WEEKLY CHARTS – 24/06/2011.

MARKET SURVIVES BEARISH H & S BREAKOUT.

In a surprising counter attack by the Bulls on Friday, the market went from strength to strength and registered a strong gain of over 500 points. In the process the market not only reversed the short term trend when it closed above the short term average of 20dma, but also more importantly closed above the neckline of the weekly Bearish Head & Shoulders pattern. As a result, there is no weekly closing below the neckline and the weekly Head and Shoulders pattern is yet to give a bearish breakout.  Interestingly both the indices successfully tested their previous bottom of Sensex 17295 and Nifty 5177 and registered a higher bottom of Sensex 17314 and Nifty 5195.

TECHNICALLY SPEAKING. 

The Sensex opened the week at 17925, made a high of 18268, a low of 17314 and closed the week at 18240. The Sensex gained 370 points on a weekly basis. Similarly Nifty opened the week at 5372, made a high of 5477, a low of 5195 and closed the week at 5471. The Nifty closed with a gain of 105 points on a weekly basis.

.

Both Sensex and Nifty opened with a gap up on Friday and went from strength to strength and as a result the gap was not filled. This gap is a Rising Gap (Sensex 17754 - 17804 and Nifty 5330 - 5343) which has occurred in an uptrend and hence will provide support whenever the indices reach that level. Since it was a decisive move and the gap marked the beginning of the rally, it can be termed as a Breakaway gap.

A strong upmove on Friday reversed the losses for the entire week and on the contrary the indices made a Bullish White Paper Umbrella on the weekly charts. The last two weeks candle formation suggests a Bullish Harami formation which is a bullish reversal pattern. This pattern requires a white candle to be formed in the next week as a confirmation for reversal. There is a big Opening White body Marubuzo formation on the daily charts on Friday. Candlestick analysis suggests continuation of Bullishness.

Strong upmove on Friday helped the market conquer and close above the short term average of 20dma (Sensex – 18166 and Nifty – 5455). As a result the short term trend has turned up. But the market is still below the medium term average of 50dma (Sensex – 18468 and Nifty – 5540) and the long term average of 200dma (Sensex – 19166 and Nifty – 5752). As a result, the short term trend has turned up but the medium term and the long term trends continue to remain down.

There exists a support zone for Sensex 17968 - 17782 and Nifty 5374 – 5318 which is a result of convergence of intermediate and long term demand lines. This support zone remained intact as there was no weekly closing below that zone, even though the support zone was breached on daily charts. A weekly closing below this support zone will confirm a Bearish Head and Shoulders Reversal pattern in intermediate as well as long term timeframe. Sensex will then have a minimum target of 15762 and Nifty 4721.

On a still shorter timeframe the market has already completed a small Bearish Head & Shoulders and the target for which is Sensex 16573 and Nifty 4964. The target for this Bearish Head and Shoulders will remain intact as long as the market remains below Sensex 18724 and Nifty 5605.

The market successfully tested the previous intermediate bottom of Sensex 17295 and Nifty 5177. In the process, a higher bottom was registered at Sensex 17314 and Nifty 5195. A weekly Bullish reversal pattern is in place. One can expect a retracement of the immediate fall of Sensex from 19811 to 17314 and Nifty 5944 to 5195. The pull-back levels in that case will be 18267-18562-18857 for the Sensex and 5481-5569-5657 for the Nifty. If we consider the entire fall from 21108 to 17295 for the Sensex and 6338 to 5177 for the Nifty then the correction levels will be 18751-19202-19651 for the Sensex and 5621-5758-5895 for the Nifty.

There are many tops between the zone formed by 50% pull-back level of the immediate fall and 38.2% of the entire fall, thus forming First Resistance Zone i.e. from Sensex 18562-18751 and Nifty 5569-5621. A close above this Resistance Zone will change the intermediate trend from down to up. Above this, there is a second resistance zone formed by the convergence of Trendline resistance, 200dma and 50% of the entire fall. Thus Sensex 19088-19202 and Nifty 5741-5758 forms a Second Resistance Zone. This zone defines the long term outlook for the market and a close above this zone will confirm a trend reversal in the long term.

Majority of the oscillators have started to turn up but still continue with their Sell mode. MACD and ROC have both started to move up but both are negative and in Sell mode. RSI has gone up to 52 and signaled a Buy. Money Flow (37) is moving higher but still in Sell mode. The OBV has just moved above the previous minor top but a higher top higher bottom formation is still not in place. Stochastic oscillator has given a Buy signal as %K has cut %D from below. The Directional Indicators are in Sell mode but are converging towards each other. –DI is losing strength while +DI is gaining strength. On Monday the Bollinger Band had given a Sell signal when the prices closed below the lower band. But the stop-loss got triggered when the prices managed a close above the 20dma on Friday. Hence the Sell signal in Bollinger band stands cancelled. 

Nifty O.I. PCR has improved and is at 1.31. Highest Open Interest build-up has shifted to 5200 Put and 5300 Put. This suggests that the market might find support in the zone of 5300 - 5200. Strong Open Interest build up is seen at 5600 Call, which should act as a resistance for the market going forward.

The Trendline Resistance for the Sensex is at 18614 - 19088. The Trendline Support is at 17968-17782.

The Trendline Resistance for the Nifty is at 5605 - 5741. The Trendline Support is at 5374-5318.

For the week ahead, Sensex will find Support at 17920-17600-17295 and will find Resistance at 18542-18845-19167.

For the week ahead, Nifty will find Support at 5373-5269-5177 and will find Resistance at 5570-5690-5801.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5177

5269

5373

5471

5570

5690

5801

Sensex

17295

17600

17920

18240

18542

18845

19167

LAST WEEKS RECOMMENDATIONS: 

PAIR NO.

STOCK

REC.PRICE

TARGET

REACHED

1

Buy

HPCL

382

392

398

Sell

OBC

317

307

312

2

Buy

Godrej Ind

202

209

205

Sell

M&M

644

624

616

3

Buy

ReL Infra

580

592

580

Sell

HDFC

638

626

625

THIS WEEKS RECOMMENDATIONS:  

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy IOC

336

330

346

358

Buy NTPC

182

179

187

193

Buy IndusInd

266

261

274

283

Buy AdaniEnt

691

681

709

729

Buy KotakBnk

447

441

458

471

WATCH OUT FOR:

IOC

NTPC

  

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.

Copyright © 2000 - 2018 Jatin Sanghavi. All rights reserved.
No part of the material on this website may be reproduced or distributed in any forms or by any means, electronics or mechanical without the written permission of the author.
Sitemap