Archives : BULLISH DIAMOND BREAKOUT - 10/08/2012.

BULLISH DIAMOND BREAKOUT – 10/08/2012.

UNDERTONE CONTINUES TO BE BULLISH.

The market went from strength to strength and in the process went above the previous intermittent top of Sensex 17631 and Nifty 5348 but is yet to close above those levels. As a result the bearish gap between Nifty 5267-5300 was filled and now a bullish gap between Nifty 5260-5220 has been created on the daily as well as weekly charts which will now act as support. A bullish breakout has been witnessed on the daily as well as the weekly charts and the target accordingly falls at Nifty 5460 in the short term and Nifty 6192 on a higher timeframe.


BULLISH DIAMOND BREAKOUT – 10/08/2012.

UNDERTONE CONTINUES TO BE BULLISH.

The market went from strength to strength and in the process went above the previous intermittent top of Sensex 17631 and Nifty 5348 but is yet to close above those levels. As a result the bearish gap between Nifty 5267-5300 was filled and now a bullish gap between Nifty 5260-5220 has been created on the daily as well as weekly charts which will now act as support. A bullish breakout has been witnessed on the daily as well as the weekly charts and the target accordingly falls at Nifty 5460 in the short term and Nifty 6192 on a higher timeframe.

TECHNICALLY SPEAKING. 

Sensex opened the week at 17313, made a high of 17726, low of 17313 and closed the week at 17557. Thus it registered a weekly gain of 360 points. At the same time the Nifty opened the week at 5260, made a high of 5377, low of 5260 and closed the week at 5320. Thus the Nifty went up by 105 points on a weekly basis.

Once again just like previous week, both Sensex and Nifty opened with a gap up and made an Opening White body Marubuzo on the weekly charts. On the daily charts the candlestick pattern is signaling a short term consolidation in the form of small body candles. Last three days have formed small body candles such that all the three bodies are within the trading range of Tuesday’s big body candle. If Monday forms a big white body candle with a higher closing as compared to last four days, then Rising Three Methods formation will get completed, which is a bullish continuation pattern.

This week the market opened with a gap up and that was sustained which has resulted in a Bullish Gap being left behind not only on the daily charts but also on the weekly charts. Thus Weekly Bullish Gap between Sensex 17291-17313 and Nifty 5246-5260 will now provide support to the indices whenever they correct.

Both the Sensex and Nifty have formed a Bullish Head and Shoulders pattern on the daily charts and the target as per the formation is at Sensex 17986 and Nifty 5460. These targets will be achieved as long as the Sensex stays above 17026 and Nifty above 5164. Interestingly on the weekly charts both Sensex and Nifty have formed a Bullish Diamond pattern and the target as per this formation is Sensex 20171 and Nifty 6192. The targets will be achieved as long as the market stays above Sensex 15748 and Nifty 4770.

This week both Sensex and Nifty went above 17631 and 5348 respectively and hence we can say that both Sensex and Nifty have resumed the pull-back of the entire fall from Sensex 21108 to 15135 and Nifty from 6338 to 4531. The pull-back levels are 17417-18122-18827 for the Sensex and 5221-5434-5648 for the Nifty.

This week both Sensex and Nifty have remained above the long term average of 200dma (Sensex – 16898 and Nifty – 5111), medium term average of 50dma (Sensex – 17071 and Nifty – 5177) and short term average of 20dma (Sensex – 17187 and Nifty – 5213) and have also closed well above these levels. As a result the trend in the long term, medium term and short term timeframe continue to be all Bullish.

Market is now well above the level of the Falling Channel Top which comes in at Sensex 15856 and Nifty 4802. These levels should now provide Support for the market. The overall bullish long term target for Falling Channel pattern breakout remains intact. The targets as per this formation are Sensex 20383 and Nifty 6148.

MACD and ROC continue with their Buy signal while remaining positive. RSI has moved higher at 62 and is indicating more bullish momentum. Stochastic Oscillator has given a fresh Sell as %K (overbought at 86) has gone below %D. MFI has moved higher (52) and is now in Buy mode. The Directional Indicators are also in Buy mode as +DI is above –DI but ADX is at 18 which suggest that the trend is sideways. OBV is showing sideways movement.

The Nifty O.I. PCR has increased and is at 1.54. For the August series, highest open interest buildup is seen at 5000 Put and 5500 Call. This suggests an overall range of 5000 on the lower side and 5500 on the higher side for this month. 

Trendline Resistance for the Sensex is at 17803. The Trendline Support for the Sensex is at 17268.

Trendline Resistance for the Nifty is at 5455. The Trendline Support for the Nifty falls at 5235.

For the week ahead, Sensex will find Support at 17208-16918-16598 and will find Resistance at 17890-18182-18523.

For the week ahead, Nifty will find Support at 5220-5135-5032 and will find Resistance at 5428-5531-5629.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5032

5135

5220

5320

5428

5531

5629

Sensex

16598

16918

17208

17557

17890

18182

18523

LAST WEEKS RECOMMENDATIONS:

Majority of the recommendations reached their targets easily except for Bata. But the star performer of the week was OFSS which went up by more than 8%!!! 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy OFSS

2781

2951

3020

125

Rs.29,875

Buy Bata

917

943

937

500

Rs.10,000

TechMah

761

802

806

500

Rs.22,500

CoLPaL

1183

1201

1205

250

Rs. 5,500

Buy STFC

573

588

599

500

Rs.13,000

Total

Rs.80,875

THIS WEEKS RECOMMENDATIONS: 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy TCS

1280

1265

1304

1329

Buy ViP

79

77

83

87

Buy IGL

252

246

261

271

Buy HindZinc

124

121

129

134

Buy ApolloTyr

85

84

88

92

WATCH OUT FOR:

TCS

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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