Archives : UPWARD JOURNEY CONTINUES - 19/07/2013.

UPWARD JOURNEY CONTINUES – 19/07/2013.

STRONG SUPPORT @ NIFTY 5889-5879.

Even as the current market rally continues, surprisingly the expected market leaders are nowhere to be seen.  This rally has seen the emergence of traditionally defensive sectors like Pharma, FMCG and IT, become the market leaders. Usually the Banking sector has always participated in a rally, but this time it is more than 18% away from its peak; same is the case with Infra, Realty and Metal. A Bullish Upward Gap registered between Sensex 19785-19723 and Nifty 5889-5879, acted as a strong support this week for both the indices. Thus the short term trend will remain positive as long as the Nifty remains above this gap of 5889-5879.

 


UPWARD JOURNEY CONTINUES – 19/07/2013.

STRONG SUPPORT @ NIFTY 5889-5879.

Even as the current market rally continues, surprisingly the expected market leaders are nowhere to be seen.  This rally has seen the emergence of traditionally defensive sectors like Pharma, FMCG and IT, become the market leaders. Usually the Banking sector has always participated in a rally, but this time it is more than 18% away from its peak; same is the case with Infra, Realty and Metal. A Bullish Upward Gap registered between Sensex 19785-19723 and Nifty 5889-5879, acted as a strong support this week for both the indices. Thus the short term trend will remain positive as long as the Nifty remains above this gap of 5889-5879.

TECHNICALLY SPEAKING. 

Sensex opened the week at 19926, made a high of 20256, low of 19649 and closed the week at 20149. Thus it registered a weekly gain of 191 points. At the same time the Nifty opened the week at 5991, made a high of 6066, low of 5910 and closed the week at 6029. Thus the Nifty went up by 20 points on a weekly basis.

Both the indices have formed a small black body candle on the daily charts, which is not a bearish formation. It is a continuation pattern formed in an uptrend. On the weekly charts, both Sensex and Nifty have formed a white body candle which also suggests continuation of uptrend on the weekly charts. Thus both weekly as well as daily charts suggest bullishness to continue in the near term.

Both the indices have formed a Bullish Upward gap between Sensex 19785-19723 and Nifty 5889-5879, which has acted as a support this week when the Sensex bounced from a low of 19649 and Nifty from 5910. Thus the short term trend will remain intact as long as this gap remains.

There is one more critical gap that both the indices formed two weeks back and i.e. a Bullish Rising gap between Sensex 19093-18925 and Nifty 5749-5699. This gap acted as a support twice as the Sensex and Nifty bounced from just above this gap. This gap marks the beginning of a bull rally and hence it can be termed as a Bullish Breakaway gap. Also this gap completed a Bullish Island Reversal pattern on the daily charts. The medium term trend will turn down if this gap is breached.

Both the indices continue to trade above the 61.8% Retracement level (Sensex 19688 and Nifty 5976) of the fall from Sensex 20443 to 18467 and Nifty 6229 to 5566 which suggests that the correction is over and the prior uptrend has resumed.

A Bullish Cup and Handle pattern got completed when Sensex closed above 19598 and Nifty above 5904. This is a Bullish Reversal pattern and the target as per this pattern falls at Sensex 20729 and Nifty 6242.

This week both the indices bounced back after testing the medium term average of 50dma (Sensex – 19555 and Nifty – 5910). Also both the indices continue to remain above the short term average of 20dma (Sensex – 19446 and Nifty – 5850) and also above the long term average of 200dma (Sensex – 19291 and Nifty – 5846). Thus the trend in the short term, medium term and long term timeframe continue to remain bullish.

Market has managed to bounce back number of times from above the Bullish Rising Gap between Sensex 18284-18062 and Nifty 5526-5447. This gap was tested many times in the last three months and has proved to be a strong support for the market. In fact this gap has consistently provided support to the market. This gap holds more significance because a breach of this gap will signal the end of the long term rally.

MACD and ROC both continue with their Buy signals; besides being in the positive zone. RSI (62) is moving higher suggesting increase in bullish momentum. Stochastic Oscillator has given a fresh Buy as %K (91) is above %D. MFI (63) has remained steady after increasing the previous week, suggesting inflow of money. ADX has fallen further to 15 suggesting that the current trend has lost all of its strength. The Directional Indicators continue with their Buy signal as +DI remains above –DI. OBV continues in Buy mode besides making higher top higher bottom formation. Thus majority of the Oscillators are suggesting continuation of short term bullishness.

The Nifty O.I. PCR has increased and is now at 1.72. This suggests that the Put writers have gained in confidence over call writers and hence the higher value of the indicator. For the next month series, highest Open interest build up is seen at 5800 Put and 6200 Call. This suggests that the market expects a trading range with support coming in at 5800 levels and resistance around 6200 levels. In the current month series, Friday saw a lot of Put writing at the strike of 5900, which suggests immediate support to come in at around 5900 level.

The Trendline Resistance for the Sensex is at 20395. The Trendline Support for the Sensex is at 19600.

The Trendline Resistance for the Nifty is at 6221. Trendline Support for the Nifty falls at 5888.

For the week ahead, Sensex will find Support at 19792-19477-19147 and will find Resistance at 20443-20762-21108.

For the week ahead, Nifty will find Support at 5936-5848-5760 and will find Resistance at 6133-6229-6338.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5760

5848

5936

6029

6133

6229

6338

Sensex

19147

19477

19792

20149

20443

20762

21108

.
LAST WEEKS RECOMMENDATIONS:
All the Recommendations of previous week did well to reach their targets with the exception of Tech Mahindra which just missed its target. However the Star Performer of the week was Bharti Airtel which went up by around 10%!!!
.

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy Bharti

305

321

334

1000

Rs.29,000

Buy OFSS

2758

2823

2864

125

Rs.13,250

TechMah

1121

1158

1141

250

Rs. 5,000

Buy IGL

289

304

312

1000

Rs.23,000

RPower

76

79

82

4000

Rs.24,000

Total

Rs.94,250

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy BajajAut

1966

1931

2016

2069

Buy Dabur

167

164

172

178

Buy TataMot

294

290

301

309

Buy TataGlob

155

152

160

166

Buy UniPhos

147

144

152

158

.
WATCH OUT FOR:
.
Bajaj Auto
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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