Archives : BEARS IN COMMAND - 04/12/2015.

BEARS IN COMMAND - 04/12/2015. 

SELL ON RISE MARKET.

All hopes of Nifty climbing back over 8000 levels were dashed, as Nifty descend started after touching an intraweek high of 7979. Even though as discussed in the previous article, both the indices still remain in a range of 8100 and 7700, the threat of breaking the lower boundary has increased due to the formation of Three Black Crows on daily charts. Interestingly, if Nifty closes below 7723, then it would have completed a bearish pattern and the target for that will be around 7092.


BEARS IN COMMAND - 04/12/2015. 

SELL ON RISE MARKET.

All hopes of Nifty climbing back over 8000 levels were dashed, as Nifty descend started after touching an intraweek high of 7979. Even though as discussed in the previous article, both the indices still remain in a range of 8100 and 7700, the threat of breaking the lower boundary has increased due to the formation of Three Black Crows on daily charts. Interestingly, if Nifty closes below 7723, then it would have completed a bearish pattern and the target for that will be around 7092.

TECHNICALLY SPEAKING.

Sensex opened the week at 26142, made a high of 26256, low of 25623 and closed the week at 25638. Thus it closed the week with a loss of 490 points. At the same time the Nifty opened the week at 7936, made a high of 7979, low of 7775 and closed the week at 7781. Thus the Nifty closed the week with a loss of 161 points.

On the weekly charts, both the indices have once again formed a real black body candle. Sensex has formed a Bearish Engulfing pattern whereas the Nifty just missed forming that. But after forming a Bullish Engulfing two weeks back, the formation of Bearish Engulfing this week holds little significance. On the daily chart both the indices have formed a black body candle on third consecutive day, giving rise to a bearish pattern called Three Black Crows. Thus daily as well as weekly candlestick study suggests a bearish bias.

The 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 too tough to be breached as the indices fell after testing this zone. Thus for any upward move to be possible, both the indices need to overcome this zone.

If the Sensex manages a close below 25517 and Nifty below 7723, then both the indices would have completed a Bearish Head and Shoulders, the target for which falls at Sensex 23276 and Nifty 7092.

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 continues in Buy mode but in negative terrain, whereas Price ROC has just turned negative and signalled a Sell. RSI (38) suggests bearish momentum. Stochastic Oscillator %K (54) is below %D and hence continues in Sell mode. OBV continues to make lower top lower bottom formation and hence in Sell mode. MFI (58) indicates positive money flow in the market. ADX remains at 25, suggests that the downtrend is still strong. The Directional Indicators continue in Sell mode as +DI remains below –DI. Thus majority of the Oscillators are negative and indicate a bearish bias.

This week, both the indices tested the short term average of 20dma (Sensex – 25955 and Nifty – 7862) but closed the week below it. However, both Sensex and Nifty continue to remain below the medium term average of 50dma (Sensex – 26395 and Nifty – 8002) and the long term average of 200dma (Sensex – 27372 and Nifty – 8293). Thus the trend in the medium term and long term timeframe continues to remain bearish whereas the short term trend has also turned negative.

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 8200. Thus Option data suggests a wide trading range with resistance coming in at 8200 and support at 7500.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7497

7593

7691

7781

7860

7979

8060

Sensex

24587

24833

25287

25638

25948

26307

26687

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy Kotak

698

726

698

500

Rs. -

Buy HUL

816

845

836

500

Rs.10,000

Sadbhav

344

357

370

1000

Rs.26,000

KalpPwr

277

289

285

1000

Rs. 8,000

RPower

51

56

54

4000

Rs.12,000

Total

Rs.56,000.

.
THIS WEEKS RECOMMENDATIONS:
.

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell EicherMot

16429

16650

16083

15721

Sell TCS

2328

2375

2257

2184

Sell HDFC

1172

1189

1146

1119

Sell AuroPh

807

826

778

748

Sell AndhraBnk

66

68

62

58

WATCH OUT FOR:

TCS

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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