Archives : BULLS STAGE A ROARING COMEBACK - 27/05/2016.

BULLS STAGE A ROARING COMEBACK - 27/05/2016.

NIFTY RECLAIMS 8100.

Last three days saw the Bulls snatch the initiative from the Bears and stage a stupendous rally. Sensex gained by more than 1300 points, whereas Nifty rose by 450 points. In the process, the Trend in the short term, medium term as well as long term has turned Bullish. Interestingly the Bullish Gap between Sensex 25358-25180 and Nifty 7772-7717 acted as strong support as Sensex bounced from a low of 25181 and Nifty 7715 for the week. Thus the upward rally will continue as long as Nifty holds above 7715.


BULLS STAGE A ROARING COMEBACK - 27/05/2016.

NIFTY RECLAIMS 8100.

Last three days saw the Bulls snatch the initiative from the Bears and stage a stupendous rally. Sensex gained by more than 1300 points, whereas Nifty rose by 450 points. In the process, the Trend in the short term, medium term as well as long term has turned Bullish. Interestingly the Bullish Gap between Sensex 25358-25180 and Nifty 7772-7717 acted as strong support as Sensex bounced from a low of 25181 and Nifty 7715 for the week. Thus the upward rally will continue as long as Nifty holds above 7715.

TECHNICALLY SPEAKING.

Sensex opened the week at 25447, made a high of 26677, low of 25181 and closed the week at 26653. Thus it closed the week with a massive gain of 1352 points. At the same time the Nifty opened the week at 7813, made a high of 8164, low of 7715 and closed the week at 8156. Thus the Nifty closed the week with a gain of 407 points.

On the daily charts, both Sensex and Nifty have made a big white body candle which is completing Three White Soldiers. On the weekly charts, both the indices have formed a big Closing White body Marubuzo. Thus both daily as well as weekly candlestick pattern suggest continuation of Bullishness in the near term.

Both the indices, once again took support at the Bullish Rising Gap between Sensex 25358-25180 and Nifty 7771-7717, before staging a sharp rally. As a result both the indices are now retracing the entire fall from Sensex 30024 to 22494 and Nifty 9119 to 6825. The relevant Retracement levels are placed at Sensex 25371-26259-27148 and Nifty 7702-7972-8243.

If the indices manage to close above the 61.8% Retracement i.e. Sensex 27148 and Nifty 8243, then it will mark the end of Correction phase and will signal a move towards testing the life highs at Sensex 30024 and Nifty 9119.

MACD and Price ROC are both positive and continue with their Buy signals. RSI (69) suggests strong bullish momentum. ADX remains at a low level of 18 which is yet to reflect the current strength of upward movement. Directional Indicators continue in Buy mode as +DI remains above –DI. A Buy signal was generated in Bollinger Band on Thursday. MFI (52) suggests Positive Money Flow. OBV continues in Buy mode. Thus majority of Oscillators are suggesting bullishness in the near term.

This week, both the indices managed to close above the short term average of 20dma (Sensex – 25593 and Nifty – 7842), medium term average of 50dma (Sensex – 25399 and Nifty – 7768) and even the long term average of 200dma (Sensex – 25607 and Nifty – 7785). Thus the trend in the short term, medium term and the long term timeframe has turned Bullish.

Options data for June series indicate highest Call Open Interest build-up has shifted to the strike of 8200 and highest Put build-up at 7900. Thus Option data suggests a trading range with resistance coming in at 8200 and support at 7900.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7853

7948

8055

8156

8252

8359

8467

Sensex

25479

25897

26256

26653

27000

27416

27851

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy BPCL

1012

987

1050

1089

Buy Siemens

1202

1176

1242

1283

Buy ReLCap

414

403

431

449

Buy CESC

562

550

581

600

Buy JsWEnergy

71

69

75

80

WATCH OUT FOR:

JSW Energy

Siemens

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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