Archives : AT A CRITICAL JUNCTURE - 22/04/2016.

AT A CRITICAL JUNCTURE - 22/04/2016.

SENSEX BELOW 200DMA.

This is a critical time for the market, as the indices grapple with the long term average of 200dma. Interestingly, Nifty overcame the 200dma and closed above it but Sensex failed to do so. A failure to overcome the 200dma in next week will not spell good news for the Bulls. Besides, the indices are facing a very strong confluence zone between Sensex 26256-26259 and Nifty 7972-7979. Only a close above it will pave the way for further upward move or else expect the downward slide to resume.


AT A CRITICAL JUNCTURE - 22/04/2016.

SENSEX BELOW 200DMA.

This is a critical time for the market, as the indices grapple with the long term average of 200dma. Interestingly, Nifty overcame the 200dma and closed above it but Sensex failed to do so. A failure to overcome the 200dma in next week will not spell good news for the Bulls. Besides, the indices are facing a very strong confluence zone between Sensex 26256-26259 and Nifty 7972-7979. Only a close above it will pave the way for further upward move or else expect the downward slide to resume.

TECHNICALLY SPEAKING.

Sensex opened the week at 25833, made a high of 26080, low of 25634 and closed the week at 25838. Thus it closed the week with a gain of 212 points. At the same time the Nifty opened the week at 7908, made a high of 7978, low of 7842 and closed the week at 7899. Thus the Nifty closed the week with a gain of 49 points.

On the daily charts, both the indices made a small body formation. On the weekly charts both Sensex and Nifty made a Bearish Doji. It is a bearish reversal pattern which requires confirmation in the form of bearish candle as next week’s formation. Thus weekly candlestick pattern study indicates bearishness in the near term.

Currently the market is undergoing Retracement of the entire fall from Sensex 30024 to 22494 and Nifty from 9119 to 6825. The relevant Retracement levels are placed at Sensex 25371-26259-27148 and Nifty 7702-7972-8243.

A strong Resistance zone is seen at Sensex 26256-26259 and Nifty 7972-7979, which is due to the confluence of 50% Retracement (Sensex – 26359 and Nifty - 7972) and previous intermittent tops (Sensex - 26256 and Nifty - 7979). Thus for further upward rally to continue, it is necessary for the indices to overcome the above Resistance zone.

If the indices fail to overcome the Resistance zone mentioned above and form a bearish candle for the coming week, then the downslide will resume. Immediate Support in that case will be seen at the Bullish Rising Gap between Sensex 25358-25180 and Nifty 7772-7717.

MACD and Price ROC are both positive and continue with their Buy signal. RSI (66) indicates bullish momentum. Stochastic Oscillator %K (86) has gone below %D; hence in Sell mode. ADX has improved to 20, which indicates that the trend is now gaining strength. Directional Indicators continue in Buy mode as +DI remains above –DI. Bollinger Band continues in Buy mode. MFI (59) still 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 grappled with the long term average of 200dma (Sensex – 25902 and Nifty – 7863). Interestingly Nifty managed to close above it, whereas Sensex failed to do so. Thus long term trend will turn Bullish only when both Sensex and Nifty close above 200dma. Both the indices continue to remain above the short term average of 20dma (Sensex – 25274 and Nifty – 7724) and even the medium term average of 50dma (Sensex – 24495 and Nifty – 7461). Thus the trend in the long term timeframe remains down, the trend in the short term timeframe as well as medium term timeframe continues to remain up.

Options data for current series indicate highest Call Open Interest build-up at 8000 and highest Put build-up has shifted to 7800. Thus Option data suggests a short trading range with resistance coming in at 8000 and support at 7800.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7551

7666

7777

7899

7979

8060

8186

Sensex

24698

25002

25479

25838

26197

26471

26800

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

HDFCBk

1081

1119

1105

500

Rs.12,000

TVSMotors

326

338

341

2000

Rs.30,000

Buy RCom

53

57

58

8000

Rs.40,000

RPower

51

55

53

12000

Rs.24,000

JindalSteeL

68

76

76

7000

Rs.56,000

Total

Rs.1,62,000.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

AmaraRajaBatt

928

905

963

999

Buy CanaraBank

211

205

220

230

Buy REC

171

167

177

184

Buy OBC

98

95

103

109

Buy RPower

52

50

56

61

WATCH OUT FOR:

OBC

Maruti

PNB

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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