Archives : BULLISH MAT HOLD - 01/07/2016.
BULLISH MAT HOLD - 01/07/2016.

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MARKET CLIMBS THE WALL OF WORRY.

The market was rocked last week by the unexpected BRexit shock, which pushed our market into a tailspin in line with global weakness. Just when it seemed that it will be a long journey back towards the intermittent top of Nifty 8300, the market surprised everyone by staging a massive pull-back rally this week and closed at a new intermittent high. The recovery was on expected lines but the surprise was the speed of recovery. Interestingly, Sensex closed just below the strong Retracement level of 61.8% i.e. 27148, which is the Trend deciding level. A close above this level will clear the way for the indices to test the life time highs.


BULLISH MAT HOLD - 01/07/2016.

MARKET CLIMBS THE WALL OF WORRY.

The market was rocked last week by the unexpected BRexit shock, which pushed our market into a tailspin in line with global weakness. Just when it seemed that it will be a long journey back towards the intermittent top of Nifty 8300, the market surprised everyone by staging a massive pull-back rally this week and closed at a new intermittent high. The recovery was on expected lines but the surprise was the speed of recovery. Interestingly, Sensex closed just below the strong Retracement level of 61.8% i.e. 27148, which is the Trend deciding level. A close above this level will clear the way for the indices to test the life time highs.

TECHNICALLY SPEAKING.

Sensex opened the week at 26347, made a high of 27243, low of 26262 and closed the week at 27144. Thus it closed the week with a gain of 747 points. At the same time the Nifty opened the week at 8039, made a high of 8356, low of 8039 and closed the week at 8328. Thus the Nifty closed the week with a gain of 240 points.

On the weekly charts, both Sensex and Nifty have made a big Opening White body Marubuzo. Last six weeks candles combine together to form a Mat Hold Pattern which is a bullish continuation pattern. This week managed a close above the high of last four week’s candle, which signals continuation of further upward movement. On the daily charts, both the indices have formed a small white body candle with an upper shadow. Thus daily as well as weekly candlestick patterns suggest Bullishness in the near term.

Sensex is now facing immediate short term resistance in the form of two Bearish Gaps which are placed at 27163-27209 and 27296-27318. The corresponding gaps on the Nifty have been overcome, but Nifty is facing an equally strong hurdle in the form of different but a relevant Bearish Gap between 8322-8359. Thus for the current upward move to extend it is necessary both Sensex and Nifty over come their strong hurdles which are in the form of Gaps.

This week while moving upwards, both the indices have left behind a Bullish Upward Gap which is between Sensex 26872-26776 and Nifty 8242-8212. This Gap will act as strong Support for the week ahead. In case the above mentioned Gaps are overcome, then one can expect strong Support at the Bullish Gap between Sensex 25941-25897 and Nifty 7948-7941.

Both the indices are undergoing a Retracement of the entire fall from Sensex 30024 to 22494 and Nifty 9119 to 6825. Market is facing strong hurdle in the form of 61.8% Retracement level for the Sensex which is at 27148. Sensex tested the above mentioned level, crossed it during intraday, but closed just shy of this level. Thus any closing above Sensex 27148 will mark the end of Correction phase and will signal a move towards testing life highs of Sensex 30024 and Nifty 9119.

MACD continues in Sell mode despite being in the positive territory. Price ROC is positive and continues in Buy mode. RSI (63) suggests bullish momentum. Stochastic Oscillator %K (88) continues in Buy mode as it is above %D. ADX has dropped to 17, which suggests the trend is still in consolidation. Directional Indicators have given a fresh Buy as +DI has gone above –DI. MFI (77) suggests Positive Money Flow. Thus majority of Oscillators are suggesting a bullish bias in the near term.

This week, both the indices overcame the short term average of 20dma (Sensex – 26726 and Nifty – 8195). Besides, both Sensex and Nifty continues to stay well above their medium term average of 50dma (Sensex – 26183 and Nifty – 8024) and even the long term average of 200dma (Sensex – 25562 and Nifty – 7787). Thus the trend in the short term timeframe has turned upwards, whereas the trend in the medium term and the long term timeframe continues to remain Bullish.

Options data for July series indicate highest Call Open Interest build-up remains at the strike of 8500 and highest Put build-up still remains at 8000. Thus Option data suggests a trading range with resistance coming in at 8500 and support at 8000.

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

BajajAuto

2678

2775

2720

250

Rs.10,500

Buy BPCL

1013

1090

1102

600

Rs.53,400

Buy Titan

390

403

414

1500

Rs.36,000

GodrejInd

378

405

415

1500

Rs.55,500

Allahabad

65

69

70

10000

Rs.40,000

Total

Rs.1,95,400.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8063

8157

8242

8328

8448

8542

8654

Sensex

26100

26447

26776

27144

27479

27866

28218

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy BajajFinance

8167

7996

8424

8685

Buy BEML

876

859

902

930

Buy HavellsInd

366

359

377

389

Buy ONGC

225

220

233

242

Buy BoB

156

152

163

171

WATCH OUT FOR:

BEML

BoB

ONGC

REC

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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