Archives : MARKET REBOUNDS ON POSITIVE GLOBAL CUES - 07/09/2012.

MARKET REBOUNDS ON POSITIVE GLOBAL CUES – 07/09/2012.

RISING GAP ACTS AS SUPPORT.

 

Market took support at the gap mentioned last week and rebounded from there. The Pull-back was possible due to the bullish global markets. Both the indices registered a bullish reversal candlestick pattern on Thursday and the bullishness lasted throughout Friday. In the process the market has regained the short term average and as a result the short term trend has turned up.

 

 

  

MARKET REBOUNDS ON POSITIVE GLOBAL CUES – 07/09/2012.

RISING GAP ACTS AS SUPPORT.

Market took support at the gap mentioned last week and rebounded from there. The Pull-back was possible due to the bullish global markets. Both the indices registered a bullish reversal candlestick pattern on Thursday and the bullishness lasted throughout Friday. In the process the market has regained the short term average and as a result the short term trend has turned up.

TECHNICALLY SPEAKING. 

Sensex opened the week at 17465, made a high of 17701, low of 17250 and closed the week at 17683. Thus it registered a weekly gain of 303 points. At the same time the Nifty opened the week at 5276, made a high of 5347, low of 5215 and closed the week at 5342. Thus the Nifty went up by 84 points on a weekly basis.

Sensex on Thursday completed a Bullish Harami pattern and Nifty on Thursday formed a Bullish Belt Hold pattern. The confirmation of Bullish reversal was given on Friday when an Opening White Marubuzo was formed after a big gap-up opening. On the weekly charts both Sensex and Nifty have formed a Bullish Harami pattern which requires a confirmation in the form of a white body candle for the next week.

Friday saw a big gap up opening after which the market has left behind one more Bullish Rising Gap between Sensex 17418-17575 and Nifty 5260-5309. This gap is likely to act as support. Last week too the market has taken support at the Bullish Gap between Sensex 17208-17313 and Nifty 5220-5260.

Currently both Sensex and Nifty are undergoing a correction of the upward rise and this correction will be completed when Sensex starts trading above 17696 and Nifty above 5360.

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 regained the short term average of 20dma (Sensex – 17604 and Nifty – 5330) and has bounced back after taking support at the 50dma (Sensex – 17388 and Nifty – 5271). At the same time both the indices continue to remain above the long term average of 200dma (Sensex – 16958 and Nifty – 5133). Thus the trend in the short term timeframe has turned bullish while 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 15651 and Nifty 4739. 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 too continues in Sell mode and is in negative zone. RSI (55) has gone above the equilibrium line and has given a fresh Buy. Stochastic Oscillator %K (22) is in Buy mode as %K is above %D. MFI continues in Sell mode as it is at 33. The Directional Indicators have signaled a fresh Buy on Friday when +DI went above -DI. ADX has fallen to 17 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 1.06. 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. 5300 strike has seen strong Put writing on Friday which suggests strong support near those levels in the short term. 

Trendline Resistance for the Sensex is at 17918. The Trendline Support for the Sensex is at 17279.

Trendline Resistance for the Nifty is at 5431. The Trendline Support for the Nifty falls at 5236.

For the week ahead, Sensex will find Support at 17418-17129-16815 and will find Resistance at 17972-18234-18523.

For the week ahead, Nifty will find Support at 5260-5189-5095 and will find Resistance at 5448-5542-5629.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5095

5189

5260

5342

5448

5542

5629

Sensex

16815

17129

17418

17683

17972

18234

18523

LAST WEEKS RECOMMENDATIONS: 

PAIR NO.

STOCK

Rec.price

Tgt

 Reached 

Lot size

Profit

1

Buy

HDFC

735

749

741

500

Rs. 3,000

Sell

ICICI

902

888

876

250

Rs. 6,500

2

Buy

CoLPaL

1207

1230

1233

250

Rs. 6,500

Sell

UltraTc

1693

1668

1645

250

Rs.12,000

3

Buy

OFSS

2975

3037

3067

125

Rs.11,500

Sell

ReLCap

319

310

319

500

Rs. -

Profit

Rs.39,500

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Maruti

1205

1191

1228

1253

Buy AsianPnt

3770

3715

3865

3965

Buy FinTech

867

853

888

912

Buy SunTV

308

303

316

325

Buy Titan

227

223

233

240

WATCH OUT FOR:

Maruti

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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