Archives : A WEEK OF REST - 28/09/2012.

A WEEK OF REST – 28/09/2012.

CONSOLIDATION BEFORE RALLY RESUMES.

The last five days turned out to be more like rest days as nothing significant seemed to have happened as far as the market action was concerned. Currently the Nifty can be said to be consolidating in a small range of 5520 on the lower side and 5720 on the higher side. Nifty has moved up nonstop from a low of 5215 in just three weeks, hence a small consolidation will help the market. A close above 5720 will resume this upward rally.

STRONG ROLLOVER IN POWER SECTOR.

The past week promised to be an action packed week but it turned out to be a peaceful week. Rollovers happened without much fireworks; it seemed as if the bulls as well as the bears were busy celebrating the Ganesh Utsav. Nifty rollover was slightly less at around 63% as compared to 64% last month. But the Market wide rollover was higher at around 83% as compared to 81% last month. Power and Sugar sector witnessed strong rollovers, while stocks like JSW Energy, Karnataka Bank, Aurobindo Pharma and India Cement witnessed high rollovers.

 

 


A WEEK OF REST – 28/09/2012.

CONSOLIDATION BEFORE RALLY RESUMES.

The last five days turned out to be more like rest days as nothing significant seemed to have happened as far as the market action was concerned. Currently the Nifty can be said to be consolidating in a small range of 5520 on the lower side and 5720 on the higher side. Nifty has moved up nonstop from a low of 5215 in just three weeks, hence a small consolidation will help the market. A close above 5720 will resume this upward rally.

STRONG ROLLOVER IN POWER SECTOR.

The past week promised to be an action packed week but it turned out to be a peaceful week. Rollovers happened without much fireworks; it seemed as if the bulls as well as the bears were busy celebrating the Ganesh Utsav. Nifty rollover was slightly less at around 63% as compared to 64% last month. But the Market wide rollover was higher at around 83% as compared to 81% last month. Power and Sugar sector witnessed strong rollovers, while stocks like JSW Energy, Karnataka Bank, Aurobindo Pharma and India Cement witnessed high rollovers.

TECHNICALLY SPEAKING. 

Sensex opened the week at 18756, made a high of 18869, low of 18552 and closed the week at 18762. Thus it registered a small weekly gain of 10 points. At the same time the Nifty opened the week at 5691, made a high of 5735, low of 5638 and closed the week at 5703. Thus the Nifty went up by 12 points on a weekly basis.

All the five days formed small body candle such that the bodies were completely within the Friday trading range. Hence we can say that nothing significant happened from an index point of view but there was lot of action in the midcap space.  This Friday formed a small white body candle with a long upper shadow and no lower shadow but that fails short of qualifying as a Shooting Star. On the weekly chart, Sensex has formed a Bearish Doji which is a bearish reversal pattern but requires confirmation in the form of a black body candle in the next week. The Nifty has formed a small white body Spinning Top which is also a neutral formation, but it creates doubt regarding the existing uptrend. Both the patterns will stand negated if the Sensex closes above 18866 and Nifty above 5720.

A Bullish Rising Gap between Sensex 18062-18284 and Nifty 5447-5526, has acted as a strong support for the market as the Sensex bounced back from a low 18291 and Nifty 5534. Thus this gap holds more significance now than before. This gap is also a Measuring Gap and the target according to Measuring Gap theory falls at Sensex 19096 and Nifty 5758.

Both Sensex and Nifty have closed above their previous intermittent top i.e. Sensex has closed above 18523 and Nifty above 5629. This has ensured a higher top, higher bottom formation for the first time on the weekly charts.

Both Sensex and Nifty needed to close above their 61.8% Retracement of the entire fall from Sensex 21108 to 15135 and Nifty 6338 to 4531, which was at Sensex 18827 and Nifty 5648. Sensex needs to close above 18827 for the long term correction to get completed whereas the Nifty has already closed above 5648.

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 are well above their short term average of 20dma (Sensex – 18125 and Nifty – 5485), medium term average of 50dma (Sensex – 17693 and Nifty – 5360) and the long term average of 200dma (Sensex – 17121 and Nifty – 5186). Thus the trend in the short term, medium term and the long term timeframe continue to be bullish.

Market had tested the Falling Channel Top and bounced back from there. Hence the overall 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 signals and both are in positive territory. RSI (72) continues in overbought zone and same is the case with Stochastic Oscillator which too has entered overbought zone as %K is at 86. ADX has moved higher up to 37 which suggest that the current uptrend is very strong. Also the Directional Indicators continue in buy mode as +DI is way above –DI. MFI has moved higher and is at 68 which suggest that money is flowing into the market. Interestingly the OBV indicator is not going in flow with other oscillators as it has made lower bottom. Bollinger Band continues with its Buy signal generated two weeks back.

The Nifty O.I. PCR for October is at 1.25. Highest Open interest build up is seen at 5400 Put and 6000 Call which suggests that the market expects a wide trading range for the October series with strong support coming in at around 5400 and resistance at around 6000 levels. Friday saw very high Put writing at the strike of 5600 and 5700 which means that the market is likely to stay above those levels.

Trendline Support for the Sensex is at 17956. Trendline Resistance for the Sensex is at 18936.

Trendline Support for the Nifty falls at 5436. Trendline Resistance for the Nifty falls at 5837.

For the week ahead, Sensex will find Support at 18523-18291-18040 and will find Resistance at 19101-19470-19811.

For the week ahead, Nifty will find Support at 5629-5534-5447 and will find Resistance at 5801-5912-6020.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5447

5534

5629

5703

5801

5912

6020

Sensex

18040

18291

18523

18762

19101

19470

19811

LAST WEEKS RECOMMENDATIONS:

Once again it was a superb week as all the recommendations reached their targets with ease except Educomp which missed the target by a whisker. But the star performers of the week were LiC Housing and Punj Lloyd which went up by around 7% and 8% respectively!!! 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy JsW

730

751

767

500

Rs.18,500

Buy JPAss

83

87

87

4000

Rs.16,000

Buy LiCHsg

267

284

285

1000

Rs.18,000

Educomp

163

170

168

2000

Rs.10,000

PunjLyd

52

55

56

4000

Rs.16,000

Total

Rs.78,500

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy OFSS

3009

2978

3067

3127

Buy JsW

756

743

776

797

Buy ABB

800

786

821

843

Buy Havells

624

612

641

659

Buy AdniPort

127

125

131

136

WATCH OUT FOR:

JSW Steel

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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