Archives : THREE WHITE SOLDIERS - 30/08/2013.

THREE WHITE SOLDIERS – 30/08/2013.

MARKETS COPYING RUPEE MOVEMENT.

Market recovered on the back of Rupee rebounding from the lows of below 68 starting Wednesday. Market is mimicking Rupee movement to the dot. Interestingly both the Rupee as well as the market are in a pull-back mode, but have not reversed their trend. Currently Sensex is witnessing a pull-back from the lows of 17448 and Nifty 5118, and the pull-back levels for that stands at 18592-18946-19299 for the Sensex and 5543-5674-5805 for the Nifty.

 

 


THREE WHITE SOLDIERS – 30/08/2013.

MARKETS COPYING RUPEE MOVEMENT.

Market recovered on the back of Rupee rebounding from the lows of below 68 starting Wednesday. Market is mimicking Rupee movement to the dot. Interestingly both the Rupee as well as the market are in a pull-back mode, but have not reversed their trend. Currently Sensex is witnessing a pull-back from the lows of 17448 and Nifty 5118, and the pull-back levels for that stands at 18592-18946-19299 for the Sensex and 5543-5674-5805 for the Nifty.

TECHNICALLY SPEAKING.

Sensex opened the week at 18602, made a high of 18728, low of 17448 and closed the week at 18619. Thus it registered a weekly gain of 100 points. At the same time the Nifty opened the week at 5499, made a high of 5528, low of 5118 and closed the week at 5471. Thus the Nifty was flat for the week with no loss or gains.

 

Last week both the indices had formed a Takuri Line formation which failed when both the indices went below the low of previous week. This week Sensex has formed a small white body Spinning Top formation with a very long lower shadow, whereas the Nifty has formed a small black body candle with an equally long lower shadow. The long lower shadow in both the indices, indicate buying pressure seen at lower levels. On the weekly chart, both Sensex and Nifty have formed Three White Soldiers pattern which is a bullish reversal pattern. Hence both daily as well as weekly charts suggest pull-back in the immediate term.

On Wednesday, the market managed to bounce back after making a low of 17448 on the Sensex and 5118 on the Nifty. Currently both Sensex and Nifty are witnessing a pull-back or retracement of the entire fall from Sensex 20443 to 17448 and Nifty 6229 to 5118. The pull-back levels for that are Sensex 18592-18946-19299 and Nifty 5543-5674-5805.

If the pull-back continues then a strong Resistance will be encountered between Sensex 19299 – 19392, which is due to the confluence of an Intermediate Top (19392), 200dma (19325) and the 61.8% Retracement (19299) of the entire fall.

As one of the most significant supports for the market, the Bullish Rising Gap between Sensex 18284-18062 and Nifty 5526-5447, was breached two weeks back; so as per Gap theory the long term rally is over and the long term trend has also reversed.

This week both Sensex and Nifty managed to come very close to the short term average of 20dma (Sensex – 18641 and Nifty – 5510) but have closed the week below it. Also both the indices continue to remain below the long term average of 200dma (Sensex – 19325 and Nifty – 5836) and the medium term average of 50dma (Sensex – 19152 and Nifty – 5715). Thus the trend in the short term, medium term and long term timeframe continue to remain bearish.

MACD has given a fresh Buy signal on Friday despite being in the negative territory. ROC has improved but still continues with its Sell signal. RSI (45) has moved higher but is still in Sell mode. Stochastic Oscillator has given a Buy on Thursday as %K (42) went above %D. MFI (57) has improved and given a Buy signal on Thursday which suggests money inflow. ADX has improved to around 24 suggesting that the current trend is now gathering strength. The Directional Indicators continue with its Sell signal as -DI is above +DI. OBV is moving higher but is still in Sell mode. Bollinger band also continues with its Sell signal. Interestingly RSI, MFI and Stochastic Oscillators are showing positive divergences in the very short term timeframe. Thus majority of the Oscillators have turned bullish and hence one can expect some more pull-back in the near term.

The Nifty O.I. PCR has improved and is now at 1.47. For the current month series, highest Open interest build up is at 5300 Put and 5500 Call. This suggests that the market expects a trading range with support coming in at 5300 levels and resistance around 5500 levels. Friday saw high amount of Put writing at 5300 strike and Call writing at 5500 strike which suggests the range between Nifty 5300 to Nifty 5500 to hold.

The Trendline Resistance for the Sensex is at 18791. The Trendline Support for the Sensex is at 17398.

The Trendline Resistance for the Nifty is at 5651. Trendline Support for the Nifty falls at 5081.

For the week ahead, Sensex will find Support at 18291-17972-17677 and will find Resistance at 18925-19237-19569.

For the week ahead, Nifty will find Support at 5393-5309-5217 and will find Resistance at 5566-5649-5754.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5217

5309

5393

5471

5566

5649

5754

Sensex

17677

17972

18291

18619

18925

19237

19569

LAST WEEKS RECOMMENDATIONS:

Except for Tech Mahindra and HCL Tech, rest of the Recommendations failed to reach their targets. However the Star Performer of the week was HCL Tech which went up by more than 10%!!! 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

TechMah

1366

1413

1428

250

Rs.15,500

JindStL

240

250

248

1000

Rs. 8,000

HCLTech

946

1021

1044

500

Rs.49,000

Buy REC

188

195

191

2000

Rs. 6,000

Buy PFC

120

125

122

2000

Rs. 4,000

Total

Rs.82,500

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Infosys

3105

3016

3238

3378

Buy HeroMot

2046

1998

2125

2209

Buy Wipro

483

473

500

519

Buy ABGShip

282

277

291

301

Buy Rolta

62

60

65

69

WATCH OUT FOR:

ABG Shipyard

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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