Archives : BULLISH MOMENTUM HELPS NIFTY OVERCOME 7600 - 18 03 2016.

BULLISH MOMENTUM HELPS NIFTY OVERCOME 7600 - 18/03/2016.

ON THE WAY TO 7718.

The Pull-Back has been so ferocious that the Nifty overcame the strong Resistance zone between 7534-7600. It took several attempts to overcome this level and finally it did it in a late surge on Friday. Nifty is now on its way to test the Measuring Gap Target of 7718. In a strong Bear market, it is not unusual to see the Pull-Backs getting extended, which is the case here. The strong nature of the Pull-Back rally will mislead many market participants into believing that the Bear market has ended but that is still not the case.


BULLISH MOMENTUM HELPS NIFTY OVERCOME 7600 - 18/03/2016.

ON THE WAY TO 7718.

The Pull-Back has been so ferocious that the Nifty overcame the strong Resistance zone between 7534-7600. It took several attempts to overcome this level and finally it did it in a late surge on Friday. Nifty is now on its way to test the Measuring Gap Target of 7718. In a strong Bear market, it is not unusual to see the Pull-Backs getting extended, which is the case here. The strong nature of the Pull-Back rally will mislead many market participants into believing that the Bear market has ended but that is still not the case.

TECHNICALLY SPEAKING.

Sensex opened the week at 24801, made a high of 24986, low of 24354 and closed the week at 24952. Thus it closed the week with a gain of 235 points. At the same time the Nifty opened the week at 7542, made a high of 7613, low of 7405 and closed the week at 7604. Thus the Nifty closed the week with a gain of 94 points.

On the daily charts, both the indices have formed a big white body candle, which looks like a breakout candle. On the weekly charts both the indices have formed a small white body candle with a long shadow. The long lower shadow indicates buying at lower levels. Thus both daily as well as weekly candlestick pattern indicate a bullish bias.

The market is witnessing a strong Pull-Back rally of the fall from Sensex 27618 and Nifty from 8336. The relevant Retracement levels for are placed at Sensex 24452-25056-25661 and Nifty 7403-7581-7759. After overcoming the 50% Retracement last week, both the indices are on its way to test the critical 61.8% Retracement level which is at Sensex 25661 and Nifty 7759.

The Pull-Back continues and is likely to run into higher Bearish Gap between Sensex 25230-25357 and Nifty 7674-7721. This Gap will now act as strong Resistance. 

While moving higher, both Sensex and Nifty left behind two Bullish Rising Gaps first between Sensex 24043-23821 and Nifty 7308-7235 and second between Sensex 24280-24383 and Nifty 7380-7406. Both these Gaps will not only provide support but are also Measuring Gaps. The relevant primary Target as per Gap Theory falls at Sensex 25370 and Nifty 7718 and secondary Target is at Sensex 26169 and Nifty 7961.

MACD and Price ROC both are positive and continue with their Buy signals. RSI (61) suggests Bullish Momentum. ADX has dropped further to below 20 and is at 18, suggesting that the prior Down-Trend has lost all its strength. Directional Indicators has just signalled a Buy as +DI has gone above –DI. MFI (72) suggests Positive Money Flow. OBV continues to make higher Top, higher Bottom formation. Thus majority of Oscillators are suggesting a positive bias in the near term.

This week, both the indices managed to stay and close above the short term average of 20dma (Sensex – 24143 and Nifty – 7337) and even the medium term average of 50dma (Sensex – 24200 and Nifty – 7356). But both Sensex and Nifty continue to remain well below the long term average of 200dma (Sensex – 26082 and Nifty – 7908). Thus, the trend in the short term and medium term timeframe is positive whereas the trend in the long term timeframe remains bearish.

Options data for March indicates highest Put Open Interest build-up has shifted further higher at the strike of 7400 and highest Call build-up has shifted to the strike of 7700, but Friday saw strong addition in Put Open Interest at the strike of 7500. Thus Option data suggests a trading range with resistance coming in at 7700 and support at 7400.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7308

7405

7512

7604

7702

7812

7906

Sensex

23855

24280

24598

24952

25287

25656

26006

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

WelspunI

973

1014

1008

500

Rs.17,500

Buy BataI

493

513

503

1000

Rs.10,000

HavellsI

290

301

297

2000

Rs.14,000

Buy KSCL

393

409

407

750

Rs.10,500

GranulesI

126

131

129

5000

Rs.15,000

Total

Rs.67,000.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy JubiliantFood

1196

1167

1241

1287

Buy SBI

191

186

199

208

Buy UBI

127

124

132

138

Buy ApolloTyres

177

173

184

192

MothersonSumi

250

244

260

271

WATCH OUT FOR:

SBI

Bharat Forge

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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