Archives : UPTREND INTACT - 14/12/2012.

UPTREND INTACT – 14/12/2012.

RETRACEMENT ON EXPECTED LINES.

Even though the market did not rise this week, it does not mean that the uptrend is under threat. The fact remains that the trend in the short, medium and long term continues to remain bullish. The current retracement was on expected lines as was pointed out in the previous week’s article. Since majority of the oscillators were in overbought zone, minor retracement was on the cards. But any retracement will provide a buying opportunity as the Nifty remains well on course to reach the first target of 6148-6160.

 

 


UPTREND INTACT – 14/12/2012.

RETRACEMENT ON EXPECTED LINES.

Even though the market did not rise this week, it does not mean that the uptrend is under threat. The fact remains that the trend in the short, medium and long term continues to remain bullish. The current retracement was on expected lines as was pointed out in the previous week’s article. Since majority of the oscillators were in overbought zone, minor retracement was on the cards. But any retracement will provide a buying opportunity as the Nifty remains well on course to reach the first target of 6148-6160.

TECHNICALLY SPEAKING. 

Sensex opened the week at 19442, made a high of 19612, low of 19193 and closed the week at 19317. Thus it registered a weekly loss of 107 points. At the same time the Nifty opened the week at 5916, made a high of 5965, low of 5839 and closed the week at 5879. Thus the Nifty went down by 28 points on a weekly basis.

Both the indices have registered a small white body candle on the daily charts. On the weekly charts both the indices have made a Bearish Engulfing pattern. But on a candle to candle basis, this week and the previous weeks candle were Spinning Top formations. This week being a small black body candle as compared to previous week’s small white body candle. For a valid Bearish Engulfing pattern, both candles should have real bodies, but here both the weeks have small body candles, hence one cannot classify this as a Bearish Engulfing pattern.

The indices continue to remain above the short term average of 20dma (Sensex – 19000 and Nifty – 5779), and medium term average of 50dma (Sensex – 18828 and Nifty – 5725). Also both the indices are well above the long term average of 200dma (Sensex – 17646 and Nifty – 5356). Thus the trend in the short term, medium term and long term timeframes continue to remain 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 @ 63 has reduced but continue above the equilibrium line. Same is the case with MFI which has reduced to 73 but indicates positive money flow in the market. Stochastic Oscillator is at 74 and in Sell mode as %K has gone below %D. ADX remains high at 32 indicating that the trend remains strong. The Directional Indicators continue in Buy mode as +DI remains above -DI. Even though OBV has reduced, it is yet to give a Sell signal. Buy signal also continues in Bollinger Band. Majority of the oscillators still remain positive and hence there is no major reason to worry.

The Nifty O.I. PCR is quite steady at 1.25. Highest Open interest build up for the December series is at 6000 Call and 5800 Put. This suggests that the market expects a small trading range for the Nifty with support coming in at 5800 and resistance around 6000 levels. Friday saw strong increase in open interest for Nifty 5800 Put. Thus Nifty 5800 level is expected to provide strong support in the near term.

Trendline Support for the Sensex is at 18780. Trendline Resistance for the Sensex is at 19653.

Trendline Support for the Nifty falls at 5732. Trendline Resistance for the Nifty falls at 5980.

For the week ahead, Sensex will find Support at 19074-18823-18523 and will find Resistance at 19612-19917-20217.

For the week ahead, Nifty will find Support at 5801-5721-5629 and will find Resistance at 5965-6057-6144.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5629

5721

5801

5879

5965

6057

6144

Sensex

18523

18823

19074

19317

19612

19917

20217

LAST WEEKS RECOMMENDATIONS:

It was an ordinary week as none of the recommendations performed as expected and could not reach their targets. 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

JsWEngy

68

72

70

4000

Rs. 8,000

PunjLyd

60

64

62

4000

Rs. 8,000

McLeod

365

376

372

1000

Rs. 7,000

AdaniPt

137

142

139

2000

Rs. 4,000

CanBnk

480

499

492

500

Rs. 6,000

Total

Rs.33,000

THIS WEEKS RECOMMENDATIONS: 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy OFSS

3175

3120

3261

3349

Buy TechMah

948

934

969

991

Buy TataMot

292

287

301

310

Buy UltraTech

1992

1975

2022

2055

Buy BoB

841

826

860

881

WATCH OUT FOR:

Tata Motors

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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