Archives : THREE BLACK CROWS - 17/04/2015.

THREE BLACK CROWS - 17/04/2015.

INDICES FAIL TO HOLD AT CRITICAL LEVELS.

Both Sensex and Nifty tested the critical levels of Sensex 29000 and Nifty above 8800 at the start of the week. But the picture changed by the ending of the week as both the indices not only failed to latch on to these levels but also formed bearish patterns on the daily as well as weekly charts. These patterns mark the end of the current pull-back and the resumption of correction. Key level to watch out for being 27953 for the Sensex and 8489 for the Nifty; a breach of these levels will open the door for the bears to test the current bottom of Sensex 27248 and Nifty 8269.

 

 


THREE BLACK CROWS - 17/04/2015. 

INDICES FAIL TO HOLD AT CRITICAL LEVELS.

Both Sensex and Nifty tested the critical levels of Sensex 29000 and Nifty above 8800 at the start of the week. But the picture changed by the ending of the week as both the indices not only failed to latch on to these levels but also formed bearish patterns on the daily as well as weekly charts. These patterns mark the end of the current pull-back and the resumption of correction. Key level to watch out for being 27953 for the Sensex and 8489 for the Nifty; a breach of these levels will open the door for the bears to test the current bottom of Sensex 27248 and Nifty 8269.

TECHNICALLY SPEAKING.

Sensex opened the week at 28955, made a high of 29094, low of 28403 and closed the week at 28442. Thus it closed the week with a loss of 437 points. At the same time the Nifty opened the week at 8801, made a high of 8844, low of 8596 and closed the week at 8606. Thus the Nifty closed the week with a loss of 174 points.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             On the daily charts, both Sensex and Nifty formed a Bearish Engulfing on Wednesday and then completed Three Black Crows pattern on Friday. It is a bearish reversal pattern indicating that the current pull-back has been completed and Correction has resumed. On the weekly chart, Sensex has formed a Dark Cloud Cover whereas Nifty has formed a Bearish Engulfing. Both are Bearish reversal pattern. Hence both daily as well as weekly candlestick patterns suggest bearishness in the near term.

Last week both the indices tested the critical 61.8% Retracement level but could not sustain as the market came crashing down from that level. This indicates that after making a lower top at Sensex 29094 and Nifty 8844, the market has resumed Correction and the levels to watch out for are at Sensex 28389-28171-27953 and 8624-8556-8489 for the Nifty. A breach of 27953 on Sensex and 8489 on Nifty will pave the way for the Sensex to test last bottom at 27248 and 8269 on Nifty.

Both the indices have already completed a Bearish Rising Wedge pattern and the target for which falls at 26049 for the Sensex and 7882 for the Nifty. This pattern will get negated only if we have closing above Sensex 30024 and Nifty 9119.

The market has closed the week below the medium term average of 50dma (Sensex – 28770 and Nifty – 8738). Nifty has managed to close below the short term average of 20dma whereas Sensex is just above that level. Also both the indices continue to stay above the long term average of 200dma (Sensex – 27408 and Nifty – 8260). Thus the trend in the short term and medium term timeframe has turned down whereas the trend in the long term timeframe still continues to remain bullish.

MACD and Price ROC both continue with their buy signal. RSI (45) has turned lower suggesting bearish momentum. Stochastic Oscillator %K (72) has gone below %D; has given a Sell signal. MFI (65) suggests positive money flow. ADX at 13 suggests that the market is in a wide trading range. Directional Indicators have given a fresh Sell as +DI has gone below –DI. Thus Oscillators are painting a mixed picture in the near term. 

Option data suggest highest Put Open Interest buildup is at the strike of 8500 and highest Call build-up is at the strike of 9000. Thus Option data suggests a trading range with support coming in at 8500 and resistance around 9000. Friday saw strong Call writing at the 8700 strike which suggests that in the near term the level of 8700 will act as an immediate resistance level.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8269

8380

8499

8606

8726

8849

8985

Sensex

27248

27670

28044

28442

28875

29183

29522

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

DivisLab

1938

1999

1958

250

Rs. 5,000

Buy BFUtil

834

866

872

500

Rs.14,000

WelspunInd

397

438

450

1000

Rs.53,000

Buy Voltas

306

319

310

1000

Rs. 4,000

Buy Polaris

169

177

175

2000

Rs.12,000

Total

Rs.88,000.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell Siemens

1326

1350

1289

1251

Sell JubFood

1474

1503

1429

1383

Sell ApolloHosp

1318

1345

1276

1233

Sell UPL

429

437

416

402

Sell JsWEngy

113

116

108

102

WATCH OUT FOR:

Apollo Hosp

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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