Archives : DOWNTREND TO CONTINUE - 20/11/2015.

DOWNTREND TO CONTINUE - 20/11/2015.

USE ‘PULL-BACKS’ TO SELL.

This week provided a minor relief as the market bounced back from a low of Nifty 7714. One should not be surprised by such minor pull-backs, as they are to be expected in a bearish market; but one should utilise that opportunity to Sell. On the higher side there lies a strong Resistance zone between Nifty 7951-7983, which the market will find difficult to cross. The trend of the market in short as well as medium and long term timeframe continues to remain bearish.


DOWNTREND TO CONTINUE - 20/11/2015. 

USE ‘PULL-BACKS’ TO SELL.

This week provided a minor relief as the market bounced back from a low of Nifty 7714. One should not be surprised by such minor pull-backs, as they are to be expected in a bearish market; but one should utilise that opportunity to Sell. On the higher side there lies a strong Resistance zone between Nifty 7951-7983, which the market will find difficult to cross. The trend of the market in short as well as medium and long term timeframe continues to remain bearish.

TECHNICALLY SPEAKING.

Sensex opened the week at 25580, made a high of 26058, low of 25451 and closed the week at 25868. Thus it closed the week with a gain of 258 points. At the same time the Nifty opened the week at 7732, made a high of 7906, low of 7714 and closed the week at 7856. Thus the Nifty closed the week with a gain of 94 points.

Both the indices have formed a small white body Spinning Top on the daily charts. On the weekly charts, both Sensex and Nifty have formed a Bullish Engulfing pattern after a fall of three weeks. Thus daily candlestick study indicates uncertainty whereas weekly study points towards bullishness. Thus candlestick study on the weekly timeframe suggests a bullish bias whereas that is not the case in daily charts.

In the short term timeframe, there lies a strong Resistance zone between Sensex 26264-26352 and Nifty 7951-7983 which is due to confluence of 38.2% Retracement of immediate fall (Sensex 26279 and Nifty 7951), 38.2% Retracement of intermediate fall (Sensex 26264 and Nifty 7965), medium term average of 50dma (Sensex 26333 and Nifty 7983) and short term average of 20dma (Sensex 26352 and Nifty 7978).

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 there is a higher degree Head and Shoulders, the target for which falls at Sensex 22552 and Nifty 6741.

MACD and Price ROC are both negative and continue in Sell mode. RSI (41) suggests bearish momentum. Stochastic Oscillator %K (22) is above %D and as a result continues in Buy mode. ADX has increased to 30, suggesting that the downtrend is strong. The Directional Indicators continue in Sell mode as +DI remains below –DI. MFI (40) continues to suggest negative money flow. OBV continues in Sell mode making lower top lower bottom formation. Bollinger Band continues in Sell mode. Thus Oscillators are suggesting a bearish bias in the near term.

This week, both the indices continued to remain below the short term average of 20dma (Sensex – 26352 and Nifty – 7978), medium term average of 50dma (Sensex – 26333 and Nifty – 7983) and the long term average of 200dma (Sensex – 27481 and Nifty – 8324). Thus the trend in the short term, medium term and long term timeframe continues to remain bearish.

Options data for November series indicates highest Put Open Interest build-up at the strike of 7700 and highest Call build-up at the strike of 8200. Thus Option data suggests a trading range with resistance coming in at 8200 and support at 7700.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7539

7635

7725

7856

7940

8055

8144

Sensex

24833

25129

25451

25868

26215

26687

27000

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell PageInd

13165

13763

12250

11335

Sell TCS

2398

2450

2318

2237

Sell AjantaPh

1341

1378

1279

1215

Sell HUL

798

820

763

727

Sell YesBnk

731

750

702

672

WATCH OUT FOR:

AjantaPh

   
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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