Archives : NIFTY TARGET 7882 - 27/03/2015.

NIFTY TARGET 7882 - 27/03/2015. 

200DMA TO BE TESTED.

The ease with which the Nifty breached the all important level of 8412 is a signal of more bearishness to follow. This does not spell good news for the bulls that are being cut to size after such a stupendous bull run. This week, both the indices gave a decisive bearish breakout for Broadening Ascending Wedge pattern after completing Rising Wedge pattern last week. Thus expect Nifty target of 7882-7533 in the medium term. In the near term the 200dma (Sensex – 27214 and Nifty – 8169) will provide good support to the market. Since the market is oversold, minor bounce back can be expected, but one should use that bounce to exit long positions or create fresh shorts at higher levels.

 

 


NIFTY TARGET 7882 - 27/03/2015. 

200DMA TO BE TESTED.

The ease with which the Nifty breached the all important level of 8412 is a signal of more bearishness to follow. This does not spell good news for the bulls that are being cut to size after such a stupendous bull run. This week, both the indices gave a decisive bearish breakout for Broadening Ascending Wedge pattern after completing Rising Wedge pattern last week. Thus expect Nifty target of 7882-7533 in the medium term. In the near term the 200dma (Sensex – 27214 and Nifty – 8169) will provide good support to the market. Since the market is oversold, minor bounce back can be expected, but one should use that bounce to exit long positions or create fresh shorts at higher levels.

TECHNICALLY SPEAKING.

Sensex opened the week at 28317, made a high of 28455, low of 27248 and closed the week at 27458. Thus it closed the week with a loss of 803 points. At the same time the Nifty opened the week at 8591, made a high of 8627, low of 8269 and closed the week at 8341. Thus the Nifty closed the week with a loss of 229 points.

On the weekly charts, both the indices have formed a big black body candle in line with the down trend. On the daily charts, last two days have formed Matching Low pattern which is a bullish reversal pattern. The pattern requires confirmation and hence a bullish candle on Monday will confirm bullish price reversal. Thus the daily charts are showing signs of minor reversal whereas the weekly charts indicate continuation of bearishness.

Market opened with a gap down on Thursday thus forming a bearish Downward Gap between Sensex 27997-28031 and Nifty 8499-8516. Besides acting as a strong resistance, this gap will also act as a Measuring Gap. Thus according to Gap theory, the target for the Sensex is at 26004 and Nifty 7896.

Both the indices have already completed a Bearish Rising Wedge pattern and the indices are on its way down to test the target of 26049 for the Sensex and 7882 for the Nifty. Besides this, the indices completed a bearish breakout for Ascending Broadening pattern and the target for that falls at Sensex 25034 and 7533 for the Nifty.

The market continued to move lower and is now on its way to test the long term support of 200dma (Sensex – 27214 and Nifty – 8169). Both the indices continue to remain below the short term average of 20dma (Sensex – 28640 and Nifty – 8693) as well as the medium term average of 50dma (Sensex – 28818 and Nifty – 8722). Thus the trend in the short term and medium term timeframe remains bearish whereas the trend in the long term timeframe still continues to remain up.

MACD and Price ROC are both negative and continue with their Sell signals. RSI (29) and Stochastic Oscillator %K (6) both continue to remain in oversold zones. MFI (28) continues to move lower suggesting money outflow. ADX at 17 suggests that the trend does not have enough strength. Directional Indicators continue in Sell mode as +DI continues to remain below –DI. The current fall is a result of negative divergence on the daily as well as weekly charts. Darryl Guppy indicator has given a fresh sell for both Sensex and Nifty. Thus majority of Oscillators are suggesting a bearish bias except for certain momentum oscillators which are already oversold in the near term. 

Option data suggest highest Call Open Interest buildup has shifted lower to the strike of 8600, whereas the highest Put build-up is at the strike of 8200. Thus Option data suggests a trading range with support coming in at 8200 and resistance around 8600. Friday saw strong Call writing at the strike of 8500 which indicates strong resistance at that level.

Trendline Resistance for the Sensex is at 27978.

Trendline Resistance for the Nifty is at 8443.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8065

8151

8236

8341

8445

8534

8627

Sensex

26469

26776

27101

27458

27786

28064

28455

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Sell Maruti

3623

3510

3537

125

Rs.10,750

Sell ICICI

319

310

302

1000

Rs.17,000

TataMtrDvr

327

305

305

1000

Rs.22,000

Sell Bhel

246

236

228

1000

Rs.18,000

TataGlob

150

143

143

2000

Rs.14,000

Total

Rs.81,750.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell ApolloHosp

1354

1383

1310

1265

Sell AsianPaint

778

798

747

715

Sell CoaLInd

348

356

336

323

Sell PFC

264

270

254

243

Sell TataPower

75

78

70

65

WATCH OUT FOR:

Asian Paints

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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