Archives : THREE BLACK CROWS ON DAILY CHARTS - 31/07/2015.

THREE BLACK CROWS ON DAILY CHARTS - 31/07/2015.

200 DMA GETS TESTED.

Nifty weekly increase of just 11 points hides the fact that it was a tough and volatile week for the market; as both the indices not only breached the 200dma on Monday but recovered well on Friday to close above it. As things stand currently, Nifty is moving in a range between 8321 on the lower side and 8654 on the higher side. A breakout of this range will determine future course of action for the indices as to whether we continue with the Correction or resume with the previous Upward Trend.

 


THREE BLACK CROWS ON DAILY CHARTS - 31/07/2015.

200 DMA GETS TESTED.

Nifty weekly increase of just 11 points hides the fact that it was a tough and volatile week for the market; as both the indices not only breached the 200dma on Monday but recovered well on Friday to close above it. As things stand currently, Nifty is moving in a range between 8321 on the lower side and 8654 on the higher side. A breakout of this range will determine future course of action for the indices as to whether we continue with the Correction or resume with the previous Upward Trend.

TECHNICALLY SPEAKING.

Sensex opened the week at 28117, made a high of 28161, low of 27416 and closed the week at 28114. Thus it closed the week with a small gain of 2 points. At the same time the Nifty opened the week at 8492, made a high of 8548, low of 8321 and closed the week at 8532. Thus the Nifty closed the week with a gain of 11 points.

On the daily charts, both the indices completed Three Black Crows on Monday when they made a third big black body candle. This pattern is a bearish reversal pattern and will stand negated only if Sensex closes above 28578 and Nifty above 8654. On Friday both the indices made an Opening White body Marubuzo. On the weekly chart, Sensex has made a Dragon Fly Doji. It can have bullish implications if it occurs in a downtrend which is not the case here. Nifty has formed a small white body candle with long lower shadow and a small upper shadow. Thus candlestick analysis suggests no major direction in the near term but slight positive bias does exist.

The market is all geared up to retest the key Retracement level of 61.8% which falls at Sensex 28604 and Nifty 8668. Last week both the indices made a high of Sensex 28578 and Nifty 8654 before drawing lower. The top of both Sensex and Nifty has been tested almost around four times, which has resulted in a Tweezer Top formation. Combining 61.8% with the Tweezer Top will form a strong Resistance zone i.e. between Sensex 28578-28604 and Nifty 8654-8668. Thus any close above these levels will not only negate the bearish Three Black Crows pattern, but will also signal an end to Correction and a resumption of prior uptrend.

On the lower side a break of Sensex 27416 and Nifty 8321 will complete a bearish pattern, which will lead the indices lower to test the Strong Support zone between Sensex 27209-27174 and Nifty 8213-8186. This Support zone is a result of confluence between the Bullish Upward Gap between Sensex 27202-27175 and Nifty 8195-8186, an intermediate low made by Sensex 27209 and Nifty 8195 and 61.8% Retracement of the current rise i.e. Sensex 27174 and Nifty 8213. A breach of this support zone will pave the way to test the lows of Sensex 26307 and Nifty 7940.

This week, both the indices tested not only the short term average of 20dma (Sensex – 28014 and Nifty – 8482), medium term average of 50dma (Sensex – 27589 and Nifty – 8342) but also the long term average of 200dma (Sensex – 27919 and Nifty – 8425). Both indices not only breached these averages during the week but managed to recover these levels by the close of the week. Thus the trend in the long term, medium term and even the short term timeframe continues to remain up. 

Bearish pattern formations still remain intact and hence one can still expect indices to achieve the target of Bearish Rising Wedge pattern which falls at 26049 for the Sensex and 7882 for the Nifty, as well as Ascending Broadening pattern and the target for that pattern is at Sensex 25034 and Nifty 7533. Coupled with this, both the indices had also completed a Head and Shoulders pattern and the target as per this pattern is at Sensex 24486 and Nifty 7425. The above mentioned patterns will fail if Sensex closes above 29094 and Nifty above 8844.

Options data for August series indicates highest Put Open Interest buildup at the strike of 8200 and highest Call build-up is at the strike of 9000. Thus Option data suggests a wide trading range with resistance coming in at 9000 and support around 8200.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8195

8315

8408

8532

8643

8774

8844

Sensex

27000

27416

27774

28114

28576

28875

29183

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Sell TCS

2505

2422

2473

125

Rs. 4,000

YesBnk

808

783

782

500

Rs.13,000

Sell ICICI

301

289

282

1000

Rs.19,000

Sell SBI

263

255

252

1000

Rs.11,000

TVSMot

252

235

228

1000

Rs.24,000

Total

Rs.71,000.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Wockhardt

1564

1529

1617

1672

Buy BhartFrg

1147

1123

1184

1223

Buy ITC

326

320

336

347

Buy AndhraBnk

74

72

78

82

Buy BomDyeing

87

83

94

101

WATCH OUT FOR:

Bombay Dyeing

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