Archives : MID-CAPS OUTPERFORM - 07/12/2012.

MID-CAPS OUTPERFORM – 07/12/2012.

RALLY NOW MORE BROAD BASED.

Mid-caps woke up from deep slumber and started to rally; was the story of last week. Even though the Nifty netted a weekly gain of just 28 points, the real story was the way mid-caps and small-caps outperformed the broader market. The trend continues to be upwards in all timeframes, but since majority of oscillators are in overbought territory, a small retracement or a dip will be a buying opportunity for the bulls. Nifty remains well on course to reach the first target of 6148-6160.

  


MID-CAPS OUTPERFORM – 07/12/2012.

RALLY NOW MORE BROAD BASED.

Mid-caps woke up from deep slumber and started to rally; was the story of last week. Even though the Nifty netted a weekly gain of just 28 points, the real story was the way mid-caps and small-caps outperformed the broader market. The trend continues to be upwards in all timeframes, but since majority of oscillators are in overbought territory, a small retracement or a dip will be a buying opportunity for the bulls. Nifty remains well on course to reach the first target of 6148-6160.

TECHNICALLY SPEAKING. 

Sensex opened the week at 19342, made a high of 19561, low of 19186 and closed the week at 19424. Thus it registered a strong weekly gain of 85 points. At the same time the Nifty opened the week at 5878, made a high of 5948, low of 5838 and closed the week at 5907. Thus the Nifty went up by 28 points on a weekly basis.

Both the indices have registered a Bearish Engulfing on the daily charts. But both the days are small body candles. Hence it falls short of being an effective Bearish Engulfing. On the weekly charts, both Sensex and Nifty have formed a small white body candle. This comes on the back of a big white body candle formation last week. This can be termed as a consolidation rather than a reversal.

The indices have safely remained above the short term average of 20dma (Sensex – 18829 and Nifty – 5728), and medium term average of 50dma (Sensex – 18764 and Nifty – 5704). Also both the indices are well above the long term average of 200dma (Sensex – 17609 and Nifty – 5345). Thus the trend in the short term, medium term and long term timeframes continue to be bullish.

On the daily chats, both Sensex and Nifty have formed a Bullish Diamond pattern and the target as per this formation is Sensex 20171 and Nifty 6192. Also 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.

Also on the weekly charts, both the indices have completed a Flag formation and the target according to the pattern comes in at Sensex 21024 and Nifty 6415. The targets will be achieved as long as the Sensex remains above 18255 and Nifty 5548. If we take the Saucer formation which is due to the fall from Sensex 18523 to 15748 and Nifty 5629 to 4770, then the target comes in at Sensex 21298 and Nifty 6488. Hence we have a Target zone of 21024 - 21298 on the Sensex and 6415 - 6488 on the Nifty.

Both the indices had bounced back from Sensex 18255 and Nifty 5548 which is within the Bullish Rising Gap between Sensex 18062-18284 and Nifty 5447-5526. This gap has acted as a strong support for the market even before as the Sensex had bounced back from a low 18291 and Nifty 5534. This gap holds more significance because a breach of this gap will signal the end of the current rally.

MACD and ROC are both positive and continue in Buy mode. RSI @ 70 continues to remain in overbought territory for more than a week now. The same story continues with MFI which is at 90 and overbought for more than a week. Stochastic Oscillator is also in overbought zone as %K is at 93. It has given a fresh Sell as %K has gone below %D. ADX has moved higher to 30 indicating that the uptrend is now strong. The Directional Indicators continue in Buy mode as +DI remains above -DI. OBV continues in Buy and is also making higher top higher bottom formation. Oscillator analysis suggests that since majority of the oscillators are overbought, minor dips can be expected; but those dips will be a buying opportunity.

The Nifty O.I. PCR is quite steady at 1.26. Highest Open interest build up for the December series is at 6000 Call and 5500 Put. This suggests that the market expects a trading range for the Nifty with support coming in at 5500 and resistance around 6000 levels. Over the last couple of days, Nifty 5800 strike has seen high Put writing and hence one can expect a strong support at Nifty 5800 in the near term.

Trendline Support for the Sensex is at 18815. Trendline Resistance for the Sensex is at 19807.

Trendline Support for the Nifty falls at 5740. Trendline Resistance for the Nifty falls at 6021.

For the week ahead, Sensex will find Support at 19137-18866-18590 and will find Resistance at 19697-19973-20238.

For the week ahead, Nifty will find Support at 5815-5733-5649 and will find Resistance at 5998-6089-6185.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5649

5733

5815

5907

5998

6089

6185

Sensex

18590

18866

19137

19424

19697

19973

20238

LAST WEEKS RECOMMENDATIONS:

Once again it was a great week as all the recommendations performed exceedingly well, except for Dr. Reddy. However the Star Performers of the week were Punj Lloyd and Jain Irrigation which went up by more than 13% and 12% respectively!!! 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

DrReddy

1819

1862

1850

125

Rs. 3,875

SterInd

108

113

117

2000

Rs.18,000

PunjLyd

54

61

61

4000

Rs.28,000

JainIrrg

67

71

75

2000

Rs.16,000

VijayaBk

58

61

63

4000

Rs.20,000

Total

Rs.85,875

THIS WEEKS RECOMMENDATIONS: 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy JsWEngy

68

66

72

77

Buy PunjLyd

60

58

64

69

Buy McLeod

365

358

376

388

Buy AdaniPrt

137

134

142

148

Buy CanBnk

480

467

499

519

WATCH OUT FOR:

Punj LLoyd

 

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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