Archives : BULLISH MOMENTUM TAKES MARKET INTO R-ZONE - 09/10/2015.

BULLISH MOMENTUM TAKES MARKET INTO R-ZONE - 09/10/2015.

DECISIVE WEEK AHEAD.

As predicted last week, the Nifty has entered the Resistance zone of 8091-8225 and even closed within it. As a result of this upward movement, the medium term trend of Nifty has turned up. The indices are currently testing the Resistance zone created by the Bearish Gap and the 61.8% Retracement level. Any closing above this Resistance zone will propel the market to test the long term average of 200dma. Next week will be decisive as earning season kicks off with Infosys leading the pack on Monday.


BULLISH MOMENTUM TAKES MARKET INTO R-ZONE - 09/10/2015.

DECISIVE WEEK AHEAD.

As predicted last week, the Nifty has entered the Resistance zone of 8091-8225 and even closed within it. As a result of this upward movement, the medium term trend of Nifty has turned up. The indices are currently testing the Resistance zone created by the Bearish Gap and the 61.8% Retracement level. Any closing above this Resistance zone will propel the market to test the long term average of 200dma. Next week will be decisive as earning season kicks off with Infosys leading the pack on Monday.

TECHNICALLY SPEAKING.

Sensex opened the week at 26379, made a high of 27200, low of 26375 and closed the week at 27079. Thus it closed the week with a gain of 859 points. At the same time the Nifty opened the week at 8005, made a high of 8232, low of 8005 and closed the week at 8189. Thus the Nifty closed the week with a gain of 239 points.

On the weekly charts both the indices have formed an Opening White body Marubuzo. On the daily charts, Nifty has formed a Bearish Harami Cross which requires a confirmation in the form of a black body candle on Monday. Thus candlestick study suggests a bullish bias.

We are in midst of a pull-back of the fall from Sensex 28578 and Nifty 8654. The corresponding Retracement levels are placed at Sensex 26264-26706-27147 and Nifty 7965-8097-8228 for the Nifty.

The indices are currently testing the Resistance zone marked by the Bearish Falling Gap on daily and weekly charts i.e. between Sensex 26730-27131 and Nifty 8091-8225. Interestingly the 100dma (Sensex 27132 and Nifty 8219) along with 61.8% Retracement level (Sensex 27147 and Nifty 8228) is coinciding with the upper boundary of the gap and hence acting as a Resistance. Whereas the 50dma (Sensex 26670 and Nifty 8097) is coinciding with the lower boundary of the gap and hence acting as a Support.

Despite the current pull-back, both the indices remain on track to achieve the targets for Head and Shoulders pattern (Sensex 24486 and Nifty 7425). Besides a higher degree Head and Shoulders got completed recently, the target for that falls at Sensex 22552 and Nifty 6741.

MACD and Price ROC are both positive and continue in Buy mode. RSI (60) suggest bullish momentum. Stochastic Oscillator (92) is in overbought zone and has signalled a Sell. ADX @ 25 suggests that the current down trend has lost lot of strength. Directional indicators continue in Sell mode. MFI (59) continues to remain above the equilibrium line suggesting positive money flow. OBV has started making higher top higher bottom formation. Thus Oscillators are showing a bullish bias in the near term.

This week, both the indices managed to overcome the medium term average of 50dma (Sensex – 26670 and Nifty – 8097). Besides, both Sensex and Nifty are above the short term average of 20dma (Sensex – 26133 and Nifty – 7939) but below the long term average of 200dma (Sensex – 27686 and Nifty – 8382). Thus the trend in the short term and medium term has turned up whereas that in the long term timeframe continues to remain bearish.

Options data for October series indicates highest Put Open Interest build-up at the strike of 8100 and highest Call build-up at the strike of 8300. Thus Option data suggests a narrow trading range with support coming in at 8100 and resistance at 8300.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7894

7997

8091

8189

8315

8408

8513

Sensex

25949

26339

26730

27079

27442

27866

28100

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy Lupin

2108

2195

2129

125

Rs. 2,625

Buy Pidilite

580

600

586

500

Rs. 3,000

TVToday

273

286

297

1000

Rs.24,000

Intellect

183

195

195

1000

Rs.12,000

RPower

43

47

47

4000

Rs.16,000

Total

Rs.57,625.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy AuroPh

787

765

821

857

Buy ICICI

286

279

297

309

Buy RCom

75

73

79

84

Buy IBReal

67

65

71

76

Buy Nalco

38

36

42

46

WATCH OUT FOR:

Nalco

RPower

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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