Archives : MARCH TOWARDS THE TOP CONTINUES - 28/02/2014.

MARCH TOWARDS THE TOP CONTINUES –  28/02/2014.

BULLS OVERCOME STIFF CHALLENGE.

.

It was a show of strength by the Bulls for the second week running as they continued its march towards the previous top. The signs are ominous, as the Bulls last week filled the first bearish gap and this week the more critical second bearish gap. A weekly close above the second bearish gap is very significant as this gap also holds the 61.8% Retracement level. As a result the prior uptrend has resumed and even the medium term trend has turned upwards.

 

 


MARCH TOWARDS THE TOP CONTINUES –  28/02/2014.

BULLS OVERCOME STIFF CHALLENGE.

. 

It was a show of strength by the Bulls for the second week running as they continued its march towards the previous top. The signs are ominous, as the Bulls last week filled the first bearish gap and this week the more critical second bearish gap. A weekly close above the second bearish gap is very significant as this gap also holds the 61.8% Retracement level. As a result the prior uptrend has resumed and even the medium term trend has turned upwards.

TECHNICALLY SPEAKING. 

Sensex opened the week at 20695, made a high of 21140, low of 20637 and closed the week at 21120. Thus it registered a weekly gain of 420 points. At the same time the Nifty opened the week at 6140, made a high of 6282, low of 6130 and closed the week at 6276. Thus the Nifty closed the week with a gain of 121 points.

On the daily charts, both Sensex and Nifty have formed an Opening White body Marubuzo which suggests continuation of bullishness in the short term. The weekly charts have formed a big white body candle for the second week running. Thus candlestick study suggests that the daily as well as weekly bias is bullish.

This week, the market overcame the critical second Bearish Gap between Sensex 20899-21123 and Nifty 6188-6263 which holds greater significance as it matches with the formation of weekly Bearish Gap i.e. Sensex 20899-21001 and Nifty 6188-6243 and the 61.8% Retracement (Sensex – 20902 and Nifty – 6231) of the recent fall. A weekly closing above this Resistance zone has opened the doors for the market to test the previous top.

A Bearish Rising Wedge formation got completed sometime back and the target as per this formation works out to be Sensex 19706 and Nifty 5841. The target is likely to be achieved as long as the Sensex remains below 21483 and Nifty below 6415.

From a longer term perspective, Market has strong Support zone between Sensex 19466-19264 and Nifty 5767-5688. This is a confluence zone formed by the presence of Bullish Rising Gap between Sensex 19444-19293 and Nifty 5738-5688, intermediate low of Sensex 19264 and Nifty 5700 and the 50% Retracement level which is at Sensex 19466 and Nifty 5767. Thus this is a strong Support Zone and a breach of this support zone will end the current long term uptrend.

This week, both Sensex and Nifty managed to close above the medium term average of 50dma (Sensex – 20802 and Nifty – 6183). Both the indices continue to stay above the short term average of 20dma (Sensex – 20520 and Nifty – 6098) and the long term average of 200dma (Sensex – 20086 and Nifty – 5987). Thus the trend in the medium term has turned positive while the trend in the short and long term timeframe remains bullish.

MACD and ROC are both positive and continues with its Buy signal. RSI (63) suggests strong bullish momentum. MFI (85) has moved higher into the overbought zone, suggesting that the market might see some profit booking from the current levels. Stochastic Oscillator continues in Buy mode as %K (96) remains above %D. ADX (21) has reduced, suggesting that the downtrend has lost its strength. The Directional Indicators have given a Buy signal as +DI has gone above -DI. OBV has moved higher and crossed the previous intermittent top, giving a Buy signal. Nifty closed above the upper Bollinger Band on Monday, giving a Buy signal. Thus Oscillators suggests positive bias in the near term.

The Nifty O.I. PCR has reduced to 1.10. For the March series, highest Open interest build up is at 6100 Put and 6300 Call. This suggests that the market expects a small trading range with support coming in at 6100 levels and resistance around 6300 levels. Friday saw strong put writing at the strike of 6200 level which is likely to act as an immediate support.

The Trendline Resistance for the Sensex is at 21350. The Trendline Support for the Sensex is at 20383.

The Trendline Resistance for the Nifty is at 6307. The Trendline Support for the Nifty falls at 6069.

For the week ahead, Sensex will find Support at 20828-20516-20149 and will find Resistance at 21409-21693-22048.

For the week ahead, Nifty will find Support at 6188-6085-5984 and will find Resistance at 6358-6471-6584.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5984

6085

6188

6276

6358

6471

6584

Sensex

20149

20516

20828

21120

21409

21693

22048

LAST WEEKS RECOMMENDATIONS:

All the recommendations given in the previous week did well and reached their targets except for JsW Steel. But the Star performer of the week was PFC which went up by more than 8%!!!

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

HCLTech

1538

1581

1590

250

Rs.13,000

JsWStL

886

908

899

500

Rs. 6,500

Buy Wipro

571

602

611

500

Rs.20,000

AdaniEnt

249

257

257

1000

Rs. 8,000

Buy PFC

153

163

166

2000

Rs.26,000

Total

Rs.73,500

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy UltraTech

1839

1815

1879

1920

Buy BajAuto

1946

1924

1984

2022

Buy AdaniEnt

254

249

262

270

Buy Crompton

128

126

132

137

Buy ViPInd

72

70

76

80

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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