Archives : 7700-8100 : RANGE TRADING CONTINUES - 27/11/2015.

7700-8100 – RANGE TRADING CONTINUES - 27/11/2015.

TREND REMAINS DOWN.

Nifty continues to oscillate in a trading range between 7700 on the lower side and 8100 on the higher side. But as pointed out in the previous week’s article the Resistance zone between Sensex 26264-26279 and Nifty 7951-7965 has been very strong and both the indices have closed just shy of this zone. Even as some oscillators are turning positive, the trend in intermediate and long term timeframe remains down.


7700-8100 – RANGE TRADING CONTINUES - 27/11/2015.

TREND REMAINS DOWN.

Nifty continues to oscillate in a trading range between 7700 on the lower side and 8100 on the higher side. But as pointed out in the previous week’s article the Resistance zone between Sensex 26264-26279 and Nifty 7951-7965 has been very strong and both the indices have closed just shy of this zone. Even as some oscillators are turning positive, the trend in intermediate and long term timeframe remains down.

TECHNICALLY SPEAKING.

Sensex opened the week at 25785, made a high of 26184, low of 25703 and closed the week at 26128. Thus it closed the week with a gain of 260 points. At the same time the Nifty opened the week at 7869, made a high of 7959, low of 7812 and closed the week at 7942. Thus the Nifty closed the week with a gain of 86 points.

Both the indices have formed a real White body candle on the weekly charts which comes on the back of Bullish Engulfing formed last week. On the daily charts the story remains same as both the indices have formed a white body candle which is in continuation of the ongoing pull-back. Thus candlestick study on the weekly as well as daily timeframe suggests a bullish bias in the near term.

As mentioned in the previous week the strong Resistance zone between Sensex 26264-26279 and Nifty 7951-7965 which is due to confluence of 38.2% Retracement of immediate fall (Sensex 26279 and Nifty 7951) and 38.2% Retracement of intermediate fall (Sensex 26264 and Nifty 7965); proved to be strong as the indices could not overcome this zone and closed just below it. A close above this Resistance zone will propel the market towards the upper boundary of the trading range which is at Sensex 26800 and Nifty 8100.

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 has given a Buy signal whereas Price ROC remains in Sell mode. RSI (50) indicates bullish momentum whereas MFI (50) indicates that positive money flow in the market. Stochastic Oscillator %K (51) remains above %D and as a result continues in Buy mode. ADX remains at 28, suggests that the downtrend is still strong. The Directional Indicators continue in Sell mode as +DI remains below –DI. The Sell signal in Bollinger Band continues for the Sensex but has been negated for the Nifty. Thus many Oscillators are turning positive and indicate positive bias in the near term.

This week, both the indices continued to remain below the medium term average of 50dma (Sensex – 26371 and Nifty – 7996) and the long term average of 200dma (Sensex – 27436 and Nifty – 8307). However, Nifty has managed to close above the short term average of 20dma (Sensex – 26141 and Nifty – 7905) whereas Sensex remains below it. Thus the trend in the medium term and long term timeframe continues to remain bearish whereas the fight for the short term trend continues.

Options data for December series indicates highest Put Open Interest build-up at the strike of 7500 and highest Call build-up at the strike of 8300. Thus Option data suggests a wide trading range with resistance coming in at 8300 and support at 7500.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7635

7725

7846

7942

8021

8116

8225

Sensex

25044

25451

25820

26128

26471

26800

27131

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

PageInd

13165

12250

12720

50

Rs.22,250

Sell TCS

2398

2318

2332

200

Rs.13,200

AjantaPh

1341

1279

1312

400

Rs.11,500

Sell HUL

798

763

787

600

Rs. 6,600

YesBnk

731

702

725

700

Rs. 4,200

Total

Rs.57,750.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Kotak Bnk

698

680

726

755

Buy HUL

816

797

845

875

Buy Sadbhav

344

336

357

371

Kalpataru Pwr

277

270

289

302

Buy Rpower

51

48

56

62

WATCH OUT FOR:

Sadbhav

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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