Archives : STEADY UPWARD RISE CONTINUES - 17/08/2012.

STEADY UPWARD RISE CONTINUES – 17/08/2012.

INCHING NORTHWARDS.

Both the indices registered their third consecutive Opening White body Marubuzo on the weekly charts. This underlines the fact the market is inching northwards in a gradual manner. As a result of gradual upward movement, a momentum oscillator like the RSI has not yet reached the overbought territory and is still indicating that there is more bullish momentum left in the market. Immediate short term target for the Nifty is at 5460.

 


STEADY UPWARD RISE CONTINUES – 17/08/2012.

INCHING NORTHWARDS.

Both the indices registered their third consecutive Opening White body Marubuzo on the weekly charts. This underlines the fact the market is inching northwards in a gradual manner. As a result of gradual upward movement, a momentum oscillator like the RSI has not yet reached the overbought territory and is still indicating that there is more bullish momentum left in the market. Immediate short term target for the Nifty is at 5460.

TECHNICALLY SPEAKING. 

Sensex opened the week at 17551, made a high of 17801, low of 17522 and closed the week at 17691. Thus it registered a weekly gain of 134 points. At the same time the Nifty opened the week at 5316, made a high of 5399, low of 5309 and closed the week at 5366. Thus the Nifty went up by 46 points on a weekly basis.

This is the third consecutive week where both Sensex and Nifty have made an Opening White body Marubuzo on the weekly charts. Even though this is the third white body candle in a row, this does not qualify to be called a Three White Soldiers. On the daily charts there is a small black body Spinning Top which is a neutral formation. The last two days candlestick pattern could have been a Homing Pigeon pattern but it is not because it has occurred in an uptrend. Thus the daily charts are indecisive whereas the weekly chart suggests continuation of bullishness.

Market has left behind a Bullish Gap 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 provide support to the indices whenever they correct. This support is also ably aided by the presence of the short term average of 20dma which also lies in its vicinity.

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.

Both Sensex and Nifty are 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 continued to remain above the long term average of 200dma (Sensex – 16899 and Nifty – 5112), medium term average of 50dma (Sensex – 17183 and Nifty – 5211) and short term average of 20dma (Sensex – 17289 and Nifty – 5243) 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 15809 and Nifty 4789. 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 64 and is indicating more bullish momentum. Stochastic Oscillator %K continues to remain overbought at 92 for third week in a row. One needs to keep in mind that the oscillator can remain overbought for days together. MFI continues to move higher in Buy mode and is at 73. The Directional Indicators are also in Buy mode as +DI is above –DI but ADX is still at 19 which suggest that the trend is sideways. OBV is showing sideways movement.

The Nifty O.I. PCR has increased and is at 1.58. 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. 5400 strike has seen strong Put writing on Friday which suggests that the market is likely to move further up in the short term. 

Trendline Resistance for the Sensex is at 17783. The Trendline Support is at 17490.

Trendline Resistance for the Nifty is at 5448. The Trendline Support falls at 5297.

For the week ahead, Sensex will find Support at 17351-17026-16671 and will find Resistance at 18001-18326-18672.

For the week ahead, Nifty will find Support at 5260-5164-5076 and will find Resistance at 5458-5545-5629.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5076

5164

5260

5366

5458

5545

5629

Sensex

16671

17026

17351

17691

18001

18326

18672

LAST WEEKS RECOMMENDATIONS:

Majority of the recommendations did well except for TCS and VIP Industries. But the star performers of the week were IGL and Apollo Tyres which went up by more than 10% and 8% respectively!!! 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy TCS

1280

1304

1285

250

Rs. 1,250

Buy ViP

79

83

81

2000

Rs. 4,000

Buy IGL

252

271

277

1000

Rs.25,000

HindZin

124

129

128

2000

Rs. 8,000

ApoTyr

85

92

92

4000

Rs.28,000

Total

Rs.66,250

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy TataChem

316

313

322

328

Buy Aban

421

414

432

445

Buy TataMot

240

237

246

253

Buy Videocon

176

174

180

185

Buy IDFC

140

137

145

151

WATCH OUT FOR:

TATA CHEM
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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