Archives : SHORT TERM TREND TURNS BULLISH - 24/12/2015.

SHORT TERM TREND TURNS BULLISH - 24/12/2015.

Wishing all the readers a Merry Christmas.

NIFTY OVERCOMES FIRST BEARISH GAP.

After testing the Bearish Gap between 7821-7853 for five successive days, finally the Nifty was able to close above that gap on Thursday. In doing so, not only the immediate Resistance has been overcome, but also the short term trend has turned bullish. A stronger test for the Nifty lies between 7944-7979 which again is strong confluence zone, acting as a Resistance zone.


SHORT TERM TREND TURNS BULLISH - 24/12/2015.

Wishing all the readers a Merry Christmas.

NIFTY OVERCOMES FIRST BEARISH GAP.

After testing the Bearish Gap between 7821-7853 for five successive days, finally the Nifty was able to close above that gap on Thursday. In doing so, not only the immediate Resistance has been overcome, but also the short term trend has turned bullish. A stronger test for the Nifty lies between 7944-7979 which again is strong confluence zone, acting as a Resistance zone.

TECHNICALLY SPEAKING.

Sensex opened the week at 25425, made a high of 25922, low of 25413 and closed the week at 25838. Thus it closed the week with a gain of 319 points. At the same time the Nifty opened the week at 7745, made a high of 7888, low of 7733 and closed the week at 7861. Thus the Nifty closed the week with a gain of 100 points.

On the weekly charts, both the indices have formed a small Opening White body Marubuzo after a bullish reversal pattern last week. On the daily charts both the indices have formed a small black body candle which is like a neutral formation. Thus weekly candlestick pattern suggests a bullish bias.

After taking support at Sensex 24867 and Nifty 7551, the indices bounced back and are in a pull-back mode. The relevant Pull-Back levels are placed at Sensex 25918-26243-26567 and Nifty 7851-7944-8036.

The Pull-Back rally overcame the Bearish Falling Gap between Sensex 25810-25857 and Nifty 7821-7853, after testing this Gap for five days. The indices closed above this gap on Thursday, suggesting that the Pull-back rally will continue and also indicating that the short term trend has turned upwards.

On the higher side, there lies a very strong Resistance zone between Sensex 26243-26256 and Nifty 7944-7979 which is a result of confluence of 50% Retracement (Sensex 26243 and Nifty 7944) and Intermediate Rally Top (Sensex 26256 and Nifty 7979). A close above this will make the medium term trend positive.

The Bearish Head and Shoulders is still intact for a target of Sensex 23276 and Nifty 7092, as long as Sensex remains below 26256 and Nifty below 7979. Besides this formation, both the indices remain on track to achieve the targets for Head and Shoulders pattern (Sensex 24486 and Nifty 7425) and also a higher degree Head and Shoulders, the target for which falls at Sensex 22552 and Nifty 6741.

MACD and Price ROC continue in Buy mode. RSI (52) suggests continuation of bullish momentum. Stochastic Oscillator %K (84) continues above %D, hence in Buy mode. OBV continues to make lower top lower bottom formation and hence in Sell mode. MFI (48) indicates negative money flow in the market. ADX has dropped to 25; indicates that the downtrend is still alive. The Directional Indicators continue in Sell mode as +DI remains below –DI. Thus Oscillators are presenting a mixed picture.

This week, both the indices tested and overcame the short term average of 20dma (Sensex – 25628 and Nifty – 7791). However, both Sensex and Nifty still remains below the medium term average of 50dma (Sensex – 26161 and Nifty – 7933) and the long term average of 200dma (Sensex – 27112 and Nifty – 8217). Thus the trend in the short term timeframe has turned up, whereas the trend in the medium term and long term timeframe continues to remain bearish.

Options data for December series indicates highest Call Open Interest build-up at the strike of 8000 and highest Put build-up at the strike of 7500. Thus Option data suggests a trading range with resistance coming in at 8000 and support at 7500.

LAST WEEKS RECOMMENDATIONS: 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

DrReddy

2974

2870

2962

125

Rs. 1,500

UltraTech

2815

2718

2782

125

Rs. 4,125

Sell ACC

1349

1312

1338

250

Rs. 2,750

Sell Strides

1306

1260

1278

250

Rs. 7,000

Sell Wipro

554

539

548

500

Rs. 3,000

Total

Rs.18,375.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7539

7667

7771

7861

7979

8060

8195

Sensex

24833

25287

25553

25838

26256

26687

27131

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy SunTV

413

402

431

450

Buy BFUtility

669

652

695

722

Buy GruhFin

274

266

287

301

Buy NTPC

139

135

145

152

Buy RPower

54

52

58

62

WATCH OUT FOR:

GruhFin

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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