Archives : RBI SPRINGS A SURPRISE; BEARS RUN FOR COVER - 16/01/2015.

RBI SPRINGS A SURPRISE; BEARS RUN FOR COVER - 16/01/2015. 

LIFETIME HIGH WITHIN STRIKING DISTANCE.

 

The RBI Governor sprang a surprise by announcing a 25bps Rate cut on the auspicious day of Makar Sankranti. The market rejoiced this surprise gift and jumped by more than 800 points. In the process, both Sensex and Nifty completed a Symmetrical Triangle breakout whose target comes to Sensex 30076 and Nifty 9030.

 

 


RBI SPRINGS A SURPRISE; BEARS RUN FOR COVER - 16/01/2015. 

LIFETIME HIGH WITHIN STRIKING DISTANCE.

 

The RBI Governor sprang a surprise by announcing a 25bps Rate cut on the auspicious day of Makar Sankranti. The market rejoiced this surprise gift and jumped by more than 800 points. In the process, both Sensex and Nifty completed a Symmetrical Triangle breakout whose target comes to Sensex 30076 and Nifty 9030.

TECHNICALLY SPEAKING. 

Sensex opened the week at 27523, made a high of 28194, low of 27203 and closed the week at 28121. Thus it closed the week with a gain of 663 points. At the same time the Nifty opened the week at 8291, made a high of 8530, low of 8236 and closed the week at 8513. Thus the Nifty closed the week with a gain of 229 points.

 

On the daily charts, both the indices opened with a gap-up on Thursday and formed a big white body candle followed by a small white body candle on Friday. On the weekly charts both Sensex and Nifty have formed a big white body candle negating the bearishness of the previous weeks black candle. Thus daily as well as weekly candlestick study suggests continuation of bullishness in the near term.

 

When the market opened with a big gap-up on Thursday, it not only overcame the 61.8% Retracement but also the bearish gap. This signaled the end of correction and start of the prior uptrend. Now the indices are within striking distance of lifetime highs. On the higher side the indices will be targeting the golden ratio target of Sensex 29554 and Nifty 8893.

 

The upward Gap (Sensex 27703-27512 and Nifty 8380-8326) formed on Thursday, will now act as immediate support for the indices. Also both the indices completed a Symmetrical Triangle pattern with potential target of Sensex 30076 and Nifty 9030.

 

MACD and Price ROC are both positive and continue with their Buy signal. Also the RSI (62) is well above the centerline suggesting bullish momentum. Stochastic Oscillator continues in Buy mode as %K (83) continues to remain above %D. MFI (72) too has moved higher suggesting positive money flow. ADX remains at low level of 17, indicating lack of strength in the trend. Directional Indicators continue in Buy mode as +DI remains above –DI. OBV has started making higher top higher bottom formation. Bollinger Band has signaled a Buy on Thursday when the indices closed above the upper band. Thus Oscillators are suggesting continuation of bullishness in the near term.

 

On Thursday, both the indices managed to close above the medium term average of 50dma (Sensex – 27792 and Nifty – 8347). Both the indices continue to remain above the short term average of 20dma (Sensex – 27487 and Nifty – 8284) and also the long term average of 200dma (Sensex – 25837 and Nifty – 7731). Thus the trend in the medium term timeframe has turned bullish whereas that in the short term as well as the long term timeframe continue to remain up.

 

Option data suggest highest Put Open Interest is at 8000 whereas the highest Call build-up has shifted to the strike of 8600. Thus Option data suggests a wide trading range with support coming in at 8000 and resistance around 8600. On Friday, strong Put writing has happened at the strike of 8500, which suggests immediate support at that level.

INDEX LEVELS:

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8065

8236

8380

8513

8626

8767

8893

Sensex

26776

27203

27698

28121

28542

28947

29352

 LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

TechMah

2680

2758

2820

125

Rs.17,500

Buy Bata

1356

1403

1447

250

Rs.22,750

Buy AuroPh

1169

1223

1188

250

Rs. 4,750

GreavesCott

154

161

159

2000

Rs.10,000

Edelweiss

58

62

64

4000

Rs.24,000

 

 

 

 

Total

Rs.79,000.

 

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy BharatForge

1018

988

1066

1115

Buy LiCHsg

487

470

514

543

Buy BemL

919

877

986

1055

Buy BheL

273

266

285

298

Buy IDFC

166

162

173

181

WATCH OUT FOR:

   BEML Rounding Bottom 

 

 

 

 

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.

Copyright © 2000 - 2018 Jatin Sanghavi. All rights reserved.
No part of the material on this website may be reproduced or distributed in any forms or by any means, electronics or mechanical without the written permission of the author.
Sitemap