Archives : KISSSING THE NECKLINE - 15 05 2015.

KISSING THE NECK-LINE - 15/05/2015. 

8300 - 8355 : IMMEDIATE RESISTANCE ZONE.

Just as was the case in the previous week, both the indices made a dash towards the neckline (of the Bearish Head and Shoulders) on Monday; and fell on Tuesday making a big bearish candle in line with the downtrend. This was the second time the indices went to kiss the neck-line and made a lower top (Sensex 27544 and Nifty 8332). This is way of confirming the bearish pattern breakout and it has been done twice. As things stand now the zone between Sensex 27544-27603 and 8300-8355 will act as immediate Resistance zone.

 


KISSING THE NECK-LINE - 15/05/2015. 

8300 - 8355 : IMMEDIATE RESISTANCE ZONE.

Just as was the case in the previous week, both the indices made a dash towards the neckline (of the Bearish Head and Shoulders) on Monday; and fell on Tuesday making a big bearish candle in line with the downtrend. This was the second time the indices went to kiss the neck-line and made a lower top (Sensex 27544 and Nifty 8332). This is way of confirming the bearish pattern breakout and it has been done twice. As things stand now the zone between Sensex 27544-27603 and 8300-8355 will act as immediate Resistance zone.

TECHNICALLY SPEAKING.

Sensex opened the week at 27249, made a high of 27544, low of 26750 and closed the week at 27324. Thus it closed the week with a gain of 219 points. At the same time the Nifty opened the week at 8243, made a high of 8332, low of 8089 and closed the week at 8262. Thus the Nifty closed the week with a gain of 71 points.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 On the daily charts, both the indices have formed a small white body candle on Friday, which seems to be a part of the Falling Three Methods as the small bodies of last three days are within the trading range of the Tuesday’s big black body candle. The pattern will get complete if a big black body candle forms on Monday. On the weekly charts, once again a white body Spinning Top has been completed which is a neutral formation. Thus last weeks Homing Pigeon required a confirmation in the form of a real white body candle which did not happen this week, as a result the Homing Pigeon could not get confirmed. Thus daily as well as weekly candlestick patterns point towards further consolidation with a bearish bias.

Currently the market is witnessing a pull-back of the immediate fall from Sensex 29094 to 26423 and Nifty from 8844 to 7997 and the relevant pull-back levels are placed at Sensex 27444-27759-28074 and Nifty 8320-8420-8521.

In last two weeks, the indices have twice tested the neckline of H&S pattern and retraced from there. In the process two lower tops have been registered (Sensex 27544 as compared to 27603 and Nifty 8332 as compared to 8355); which are now coinciding with the 200dma (Sensex – 27588 and Nifty – 8300) along with 38.2% Retracement level i.e. Sensex 27444-27603 and Nifty 8300-8355 will act as resistance zone going forward.

This week both the indices managed to stay below the important long term average of 200dma (Sensex – 27588 and Nifty – 8300), medium term average of 50dma (Sensex – 28100 and Nifty – 8521) as well as the short term average of 20dma (Sensex – 27369 and Nifty – 8283). Thus the trend in the short term, medium term and also the long term timeframe continues to remain down. 

Both the indices are progressing towards target of Bearish Rising Wedge pattern which falls at 26049 for the Sensex and 7882 for the Nifty. Besides this, both the Sensex and Nifty had also completed an Ascending Broadening pattern and the target for that pattern is at Sensex 25034 and Nifty 7533. Coupled with this, both the indices have also completed a Head and Shoulders pattern and the target as per this pattern is at Sensex 24486 and Nifty 7425.

MACD has signaled a buy this week whereas Price ROC is negative and continues with its Sell signal. RSI (46) has moved higher but still suggests bearish momentum. Stochastic Oscillator %K (56) is above %D, thereby continuing with its Buy signal. MFI (54) has just gone above the equilibrium line suggesting positive money flow. OBV continues to make lower top lower bottom formation. ADX has increased to 25, suggesting that the current downtrend is gaining strength. Directional Indicators continue with its Sell signal as +DI remains below –DI. Thus Oscillators are giving mixed signals thus suggesting consolidation with a bearish bias.

Options data indicates highest Call Open Interest buildup at the strike of 8500 and highest Put build-up is at the strike of 8000. Thus Option data suggests a wide trading range with support coming in at 8000 and resistance around 8500.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7961

8065

8167

8262

8355

8470

8574

Sensex

26469

26776

27051

27324

27703

28044

28384

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Grasim

3493

3383

3456

125

Rs. 4,625

Sell TCS

2527

2460

2480

125

Rs. 5,875

Sell M&M

1180

1144

1170

250

Rs. 2,500

Sell IGL

398

383

395

1000

Rs. 3,000

Sell PFC

256

248

252

1000

Rs. 4,000

Total

Rs.20,000.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell TCS

2511

2565

2430

2347

Sell ACC

1472

1503

1426

1379

Sell JsWSt

876

903

835

793

Sell Havells

271

277

261

250

Sell REC

295

301

285

274

WATCH OUT FOR:

Havells

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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