Archives : WHAT A WEEK !!! - 02/12/2011.

WHAT A WEEK !!!   02/12/2011.

SHORT , MEDIUM TERM TREND TURN BULLISH.

We are certainly living in interesting times, how else can one explain this week’s stupendous pull-back. The weekly gain was almost more than 7% on both the indices and that too after several failed pull-back attempts witnessed over the last few weeks. This rally can be attributed to strong global markets. Certain key levels have been regained and short term and medium trends have turned positive. Interestingly the candlestick formation on the weekly charts is not exactly bullish, infact it is a part of a Bearish Continuation pattern. Bears will try to reassert themselves next week, so keep your fingers crossed.

 

 


WHAT A WEEK !!!   02/12/2011.

SHORT , MEDIUM TERM TREND TURN BULLISH.

We are certainly living in interesting times, how else can one explain this week’s stupendous pull-back. The weekly gain was almost more than 7% on both the indices and that too after several failed pull-back attempts witnessed over the last few weeks. This rally can be attributed to strong global markets. Certain key levels have been regained and short term and medium trends have turned positive. Interestingly the candlestick formation on the weekly charts is not exactly bullish, infact it is a part of a Bearish Continuation pattern. Bears will try to reassert themselves next week, so keep your fingers crossed.

TECHNICALLY SPEAKING.

The Sensex opened the week at 15890, made a high of 16888, a low of 15849 and closed the week at 16846. The Sensex gained a mammoth 1151 points on a weekly basis. Similarly Nifty opened the week at 4769, made a high of 5062, a low of 4754 and closed the week at 5050. The Nifty too closed with a strong weekly gain of 340 points. 

As pointed out in the last week’s candlestick analysis the rally continued after a Tweezer Bottom was formed two weeks back. This week has seen a big white body candle almost like a Complete White Body Marubuzo, on both Sensex and Nifty. Interestingly the white body on the weekly charts is a part of Downside Gap Three Method which is a Bearish Continuation pattern. This pattern requires a confirmation in the form of a Black body candle for next week. So next week will see intense fight between the Bulls and the Bears. On the daily charts there is a big white body candle formed on Friday which is inline with the bullishness witnessed during the entire week.

 This week saw a Bullish Gap being formed on the daily charts i.e. between Sensex 16210-16428 and Nifty 4866-4916. This gap will now act as support in case of a fall. Besides, this gap can be classified as a Measuring Gap and the target for which falls at Sensex 17160 and Nifty 5143. 

The downtrend is not over as yet, what we are witnessing is a pull-back from lower levels. The pull-back started after Sensex rebounded after making a low of 15478 and Nifty 4639. Pull-back is of the current fall from Sensex 17908 to 15478 and Nifty 5399 to 4639.  The pull-back levels are Sensex 16406-16693-16980 and Nifty 4929-5019-5109.

Bulls made a comeback this week and in the process both Sensex and Nifty closed above the short term average of 20dma (Sensex – 16583 and Nifty – 4977) and medium term average of 50dma (Sensex – 16702 and Nifty – 5019). As a result, the short and medium term trend has turned up. Both the indices continue to be below the long term average of 200dma (Sensex – 17800 and Nifty – 5344). As a result the long term trend continues to remain down.

Since last Deepawali, both the indices have been moving lower in a Falling Channel. The bottom end of the Falling Channel, which should act as support, falls at Sensex 14957 and Nifty 4475 and top end, which will provide resistance, is at Sensex 17809 and Nifty 5375. On a longer term timeframe the Bearish Head & Shoulders and Bearish Descending Triangle on the weekly charts still stand, and so do their targets. The target for the Bearish Head and Shoulders pattern on the weekly charts stands at Sensex 14651-13928 and Nifty 4357-4143. This target holds true as long as the Nifty stays below 5740.

Interestingly many oscillators have just turned positive. MACD has just signaled a Buy. ROC too has just given a Buy as it has turned positive. RSI too has given a Buy as it moves above the centerline and is currently at 55. Stochastic Oscillator too is in buy mode as %K remains above %D. ADX has decreased slightly to 22 suggesting that the downtrend has lost some of its strength. Interestingly Directional Indicators have just given a Buy as +DI has just gone above –DI. MFI is moving higher and is at 41. OBV is not yet in Buy mode but has just started moving higher. Sell signal given by the Bollinger Band has been negated as the indices have managed a close above the 20dma.

Nifty OI PCR has improved and is at 1.46. Highest Open Interest is seen at 4700 Put. Highest Call writing is seen at 5100 strike. Hence for the current series, one can expect a broad Nifty movement from 4700 on the lower side to 5100 on the higher side. 

Trendline Resistance for the Sensex is at 17809.

Trendline Resistance for the Nifty is at 5375.

For the week ahead, Sensex will find Support at 16488-16123-15745 and will find Resistance at 17171-17469-17792.

For the week ahead, Nifty will find Support at 4946-4832-4720 and will find Resistance at 5160-5262-5373. 

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

4720

4832

4946

5050

5160

5262

5373

Sensex

15745

16123

16488

16846

17171

17469

17792

LAST WEEKS RECOMMENDATIONS: 

PAIR NO.

STOCK

Rec.price

Tgt

 Reached 

Lot size

Profit

1

Buy

GMDC

176

182

184

2000

Rs. 16,000

Sell

HDFC

613

598

613

500

Rs. --------

2

Buy

TTK

2596

2714

2743

125

Rs. 18,375

Sell

HeroM

2036

1997

1971

250

Rs. 16,250

3

Buy

OnMob

67

71

72

2000

Rs. 10,000

Sell

RPower

85

81

84

2000

Rs. 2,000

Profit

Rs.62,625

THIS WEEKS RECOMMENDATIONS:  

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy BajajAuto

1714

1697

1740

1769

Buy CoreEdu

289

283

299

310

Buy AxisBnk

1005

992

1025

1047

Buy ReLCap

302

297

311

321

Buy TataMtr

101

98

105

109

WATCH OUT FOR:

Bajaj Auto

CoreEdu

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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