Archives : NIFTY SUPPORT AT 5190 - 31/08/2012.

NIFTY SUPPORT AT 5190 – 31/08/2012.

SHORT TERM TREND TURNS DOWN.

Market continued to correct this week and has entered the support zone formed by the gap on the daily charts between Sensex 17313-17208 and Nifty 5260-5220 and the medium term average of 50dma. Market has held on to the medium term support of 50dma, but has gone below the short term average of 20dma. Thus the short term trend has turned down, while the medium and long term trends continue to remain up.

  


NIFTY SUPPORT AT 5190 – 31/08/2012.

SHORT TERM TREND TURNS DOWN.

Market continued to correct this week and has entered the support zone formed by the gap on the daily charts between Sensex 17313-17208 and Nifty 5260-5220 and the medium term average of 50dma. Market has held on to the medium term support of 50dma, but has gone below the short term average of 20dma. Thus the short term trend has turned down, while the medium and long term trends continue to remain up.

TECHNICALLY SPEAKING. 

Sensex opened the week at 17769, made a high of 17820, low of 17337 and closed the week at 17380. Thus it registered a weekly loss of 403 points. At the same time the Nifty opened the week at 5387, made a high of 5399, low of 5238 and closed the week at 5258. Thus the Nifty went down by 128 points on a weekly basis.

This week formed a big black body formation which was a confirmation of the bearish Shooting Star formed last week. On the daily charts the Sensex has formed a Bearish Engulfing pattern. Bearish Engulfing usually forms at the top, but that is not the case here. It is possible that it may form a bullish reversal pattern called Last Engulfing Bottom provided a white body candle is formed on Monday. Whereas Nifty has formed a black body candle on Friday but that is not an Engulfing pattern.

Market has taken support at the Bullish Gap between Sensex 17291-17313 and Nifty 5246-5260 which is also ably aided by the presence of the medium term average of 50dma which also lies in its vicinity.

Both the Sensex and Nifty have almost achieved their targets as per the short term Bullish Head and Shoulders pattern. The targets as per the formation were at Sensex 17986 and Nifty 5460 and the Sensex reached a high of 17972 and Nifty 5448. 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.

On an immediate basis if the indices continue to drift lower then one needs to consider retracement of the short term rise from Sensex 16598 to 17972 and Nifty from 5032 to 5448. The retracement levels are at 17447-17285-17123 for the Sensex and 5289-5240-5191 for the Nifty. If we look at one timeframe higher then we need to consider the rise from Sensex 15748 to 17972 and Nifty from 4770 to 5448. The retracement levels for this are at Sensex 17123-16860-16598 and 5189-5109-5029 for the Nifty.

A strong Support zone has been formed between Nifty 5191-5189 and at Sensex 17123 because there is a confluence of the 61.8% Retracement of the immediate rise from Sensex 16598 to 17972 and Nifty from 5032 to 5448 and 38.2% Retracement of the rise from Sensex 15748 to 17972 and Nifty from4770 to 5448.

This week both Sensex and Nifty have closed below the short term average of 20dma (Sensex – 17597 and Nifty – 5334) but has taken support at the 50dma (Sensex – 17340 and Nifty – 5258). At the same time both the indices continue to remain above the long term average of 200dma (Sensex – 16922 and Nifty – 5121). Thus the trend in the short term timeframe has turned down but the trend in the medium term and long term timeframe continues to remain up.

Market is now well above the level of the Falling Channel Top which comes in at Sensex 15708 and Nifty 4756. 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 continues in Sell mode even while remaining in the positive zone. The ROC has signaled a Sell as it has turned negative. RSI has given a Sell and is at 44. Stochastic Oscillator %K is oversold at 14 but is in Sell mode as %K is below %D. MFI is also in Sell mode as it has fallen to 40. The Directional Indicators are in Sell mode as -DI is above +DI. ADX has fallen to 18 which suggest that the market is once again not having a clear trend. OBV is showing sideways movement.

The Nifty O.I. PCR has fallen to 1.04. For the September series, highest open interest buildup is seen at 5200 Put and 5600 Call. This suggests an overall range of 5200 on the lower side and 5600 on the higher side. 5400 strike has seen strong Call writing on Friday which suggests strong resistance near those levels in the short term. 

Trendline Resistance for the Sensex is at 17993. The Trendline Support is at 17159.

Trendline Resistance for the Nifty is at 5435. The Trendline Support falls at 5205.

For the week ahead, Sensex will find Support at 17109-16799-16485 and will find Resistance at 17664-17972-18234.

For the week ahead, Nifty will find Support at 5177-5093-4994 and will find Resistance at 5348-5448-5545.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

4994

5093

5177

5258

5348

5448

5545

Sensex

16485

16799

17109

17380

17664

17972

18234

LAST WEEKS RECOMMENDATIONS:

Only two stocks reached their targets STFC and Cairn. 

STOCK

Reco. Price

Tgt

Reached

Buy CoalInd

367

376

370

Buy STFC

613

628

641

Buy HindOil

125

129

126

Buy Ranbaxy

551

566

560

Buy Cairn

342

350

350

THIS WEEKS RECOMMENDATIONS:

This week is expected to be very volatile and hence Pair Strategies are suggested. 

PAIR NO.

STOCK

CMP

SL

TGT - 1

TGT -2

1

Buy

HDFC

735

726

749

764

Sell

ICICI

902

910

888

873

2

Buy

CoLPaL

1207

1193

1230

1254

Sell

UltraTech

1693

1709

1668

1642

3

Buy

OFSS

2975

2935

3037

3099

Sell

ReLCap

319

325

310

301

WATCH OUT FOR:

HDFC

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