Archives : BEARISH TRI-STAR IN NIFTY - 04/04/2012.

BEARISH TRI-STAR IN NIFTY – 04/04/2012.

NIFTY NEEDS A CLOSE ABOVE 5378.

The short truncated week came to a close without much activity which can be seen by the candle formations on the daily charts. Interestingly all the three days in this week saw neutral candles being formed on the Nifty. This means that the market is under consolidation. If a big black body candle is formed on Monday then that will confirm a bearish reversal on the daily charts. Upmove is likely to resume only if Sensex closes above 17664 and Nifty above 5378.

 

 


BEARISH TRI-STAR IN NIFTY – 04/04/2012.

NIFTY NEEDS A CLOSE ABOVE 5378.

The short truncated week came to a close without much activity which can be seen by the candle formations on the daily charts. Interestingly all the three days in this week saw neutral candles being formed on the Nifty. This means that the market is under consolidation. If a big black body candle is formed on Monday then that will confirm a bearish reversal on the daily charts. Upmove is likely to resume only if Sensex closes above 17664 and Nifty above 5378.

TECHNICALLY SPEAKING. 

Sensex opened the week at 17429, made a high of 17664, low of 17382 and closed the week at 17486. Thus it registered a weekly gain of 82 points. At the same time the Nifty opened the week at 5296, made a high of 5378, low of 5278 and closed the week at 5322. Thus the Nifty went up by just 27 points on a weekly basis.

It was a three day week and all the days formed a neutral candlestick formation which comes close to being called a Bearish Tri-Star formation. The formation on Monday even though a neutral formation, had a comparatively bigger body but still is within acceptable limits. This formation requires a black body candle formation on next day to confirm a Bearish Reversal. Only a close above Sensex 17664 and Nifty 5378 will negate the Bearish Tri-Star formation. On the weekly charts, both the indices have formed a small white body candle with a long upper shadow and a small lower shadow. The long upper shadow represents selling pressure at higher levels.

Indices managed to conquer the medium term average of 50dma (Sensex – 17556 and Nifty – 5330) for a while, but could not sustain and finally closed the week just below the 50dma. Both Sensex and Nifty took support at the short term average of 20dma (Sensex – 17415 and Nifty – 5300) on Wednesday. Both the indices have managed to remain above the long term average of 200dma (Sensex – 17087 and Nifty – 5147). As a result, the trend in the Short term timeframe remains Bullish whereas the Medium term timeframe trend remains Bearish. The trend in the Long term timeframe continues to be Bullish.

Last week the Nifty went up leaving behind a Bullish Rising Gap between 5203 - 5194. This gap will act as a Support for the market.

The market recovered after making an intermediate bottom at Sensex 16920 and Nifty 5135. Only if this intermediate bottom is breached, the correction will resume. The market will once again correct the entire rise from Sensex 15135 to 18523 and Nifty from 4531 to 5629 and the Correction levels will be 17229-16829-16429 for the Sensex and 5210-5080-4950 for the Nifty.

Last week the market went down upto the level of the Falling Channel Top and it once again acted as a support. This level has provided strong support to the market for the second time in this month. Currently the Falling Channel Top falls at Sensex 16933 and Nifty 5112. The overall bullish target for Falling Channel pattern breakout remains intact. The targets as per this formation are Sensex 20383 and Nifty 6148.

A strong support is likely to emerge between Sensex 17087 – 16920 and Nifty 5147-5112 which is a result of confluence of immediate current bottom, critical level of 200dma and the Falling Channel Top.

MACD and ROC have signaled a fresh Buy. MACD is still in negative territory whereas ROC has just turned positive. RSI (51) continues to remain above the centerline and thus in Buy mode. Stochastic Oscillator (58) continues in Buy mode as %K is above %D. ADX has now reduced further to 14 suggesting that the market is trendless. Directional Indicators had a positive crossover on Monday as +DI went above –DI. MFI is in Sell mode as it is below the centerline at 35. OBV is moving sideways.

Nifty O.I. PCR is at a reasonable level of 1.32. Highest open interest buildup is seen at 5200 Put. Thus in the immediate future, Nifty will find support at 5200. High Call writing is seen at the strike of 5600. One can expect the level of 5600 to act as a Resistance. Thus expect a Trading range between 5200-5600 for the current month series.

Trendline Resistance for the Sensex is at 17605. The Trendline Support for the Sensex is at 16933.

Trendline Resistance for the Nifty is at 5360. The Trendline Support for the Nifty falls at 5112.

For the week ahead, Sensex will find Support at 17211-16920-16669 and will find Resistance at 17832-18182-18523.

For the week ahead, Nifty will find Support at 5228-5135-5034 and will find Resistance at 5428-5532-5629.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5034

5135

5228

5322

5428

5532

5629

Sensex

16669

16920

17211

17486

17832

18182

18523

LAST WEEKS RECOMMENDATIONS:

All the recommendations did well to reach their targets despite a truncated week. The Star Performer for the last week was Rolta which went up by more than 6%!!! 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

TataStl

471

483

483

500

Rs.6,000

Bhushan

416

428

430

1000

Rs.14,000

IGL

379

388

392

500

Rs.6,500

Raymond

424

437

439

1000

Rs.15,000

Rolta

93

96

99

4000

Rs.24,000

Total

Rs.65,500

THIS WEEKS RECOMMENDATIONS: 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy BGR

355

350

363

372

Buy Dhanlakshmi

75

73

79

83

Buy TTKPrestige

3215

3154

3319

3429

Buy GujFlouro

527

518

542

560

Buy STFC

612

601

631

651

WATCH OUT FOR:

BGR

Dhanalakshmi Bank

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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