Archives : DECISIVE WEEK AHEAD - 29/07/2016.

DECISIVE WEEK AHEAD - 29/07/2016.

MIDCAPS CONTINUE TO OUTPERFORM.

A bullish breakout was observed last week as the Nifty moved well above the 8600 mark. As a result of this, Nifty is now headed towards the Flag pattern target of 8869. The coming week is likely to see high degree of Volatility as the Government will grapple to pass the GST bill. The probability of getting the bill passed has increased and if that happens then the Nifty may well see a surge towards the 8800 mark. But if the Opposition manages to stall the GST bill, then Nifty may well test the strong Support in the form of weekly Bullish Gap between 8407-8398.


DECISIVE WEEK AHEAD - 29/07/2016.

MIDCAPS CONTINUE TO OUTPERFORM.

A bullish breakout was observed last week as the Nifty moved well above the 8600 mark. As a result of this, Nifty is now headed towards the Flag pattern target of 8869. The coming week is likely to see high degree of Volatility as the Government will grapple to pass the GST bill. The probability of getting the bill passed has increased and if that happens then the Nifty may well see a surge towards the 8800 mark. But if the Opposition manages to stall the GST bill, then Nifty may well test the strong Support in the form of weekly Bullish Gap between 8407-8398.

TECHNICALLY SPEAKING.

Sensex opened the week at 27753, made a high of 28240, low of 27736 and closed the week at 28051. Thus it closed the week with a gain of 248 points. At the same time the Nifty opened the week at 8519, made a high of 8674, low of 8517 and closed the week at 8638. Thus the Nifty closed the week with a gain of 97 points.

On the weekly charts, both Sensex and Nifty have made an Opening White body Marubuzo. Since it has formed in an uptrend, it will act as bullish continuation pattern. On the daily charts, both the indices have formed a pattern resembling Bearish Engulfing but it cannot be termed as one, as both are small body candles. Thus weekly candlestick analysis suggests a bullish bias in the near term.

A bullish breakout of the Trading range was witnessed last week, when Sensex closed above 28048 and Nifty above 8594. As a result one can expect the indices to move towards the Flag pattern target of Sensex 28859 and Nifty 8869.

Coming week is likely to witness lot of volatility as the political scenario will take centre-stage with focus on passing of GST bill. Even though there seems a marked increase in probability of passing the GST bill, but in case if it does not get passed then one can expect a Sell-off; which can lead the market to test the strong Support in the form of Bullish Weekly Gap between Sensex 27358-27294 and Nifty 8407-8398.

The above Weekly Bullish Gap (Sensex 27358-27294 and Nifty 8407-8398) is also a Measuring Gap and the target for which falls at Sensex – 28741 and Nifty – 8833.

As the Sensex and Nifty continue to remain above their critical 61.8% Retracement level (Sensex – 27148 and Nifty 8243) of the entire fall from Sensex 30024 to 22494 and Nifty 9119 to 6825. This marks the end of Correction phase and is now signalling a move towards testing life highs of Sensex 30024 and Nifty 9119.

Three weeks back both the indices completed a Bullish Flag pattern and the target for the pattern falls at Sensex – 28859 and Nifty – 8869. Both the targets will be achieved as long as Sensex remain above 27034 and Nifty above 8287.

MACD and Price ROC both are positive and continue with their Buy signals. RSI (66) suggests bullish momentum. Stochastic Oscillator %K (88) is in Sell mode as it is below %D. ADX has improved to 28 which suggest that Uptrend is getting stronger. Directional Indicators continue in Buy mode as +DI is above –DI. MFI (66) suggests Positive Money Flow. Thus majority of Oscillators are suggesting a bullish bias in the near term.

This week, both the indices continued to remain well above the short term average of 20dma (Sensex – 27713 and Nifty – 8505), medium term average of 50dma (Sensex – 27003 and Nifty – 8280) and even the long term average of 200dma (Sensex – 25738 and Nifty – 7845). Thus the trend in the short term, medium term and the long term timeframe continues to remain Bullish.

Options data for August series indicate highest Call Open Interest build-up at the strike of 9000 and highest Put build-up at 8500. Thus Option data suggests a wide trading range with resistance coming in at 9000 and support at 8500.

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

DivisLab

1204

1242

1229

600

Rs.15,000

Buy BemL

982

1017

1035

500

Rs.26,500

HavellsInd

375

388

391

2000

Rs.32,000

TatMtrDr

329

342

334

2100

Rs.10,500

Buy PricoL

104

115

122

5000

Rs.90,000

Total

Rs.1,74,000.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8294

8407

8521

8638

8735

8844

8938

Sensex

27034

27358

27637

28051

28417

28822

29183

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy SRF

1465

1430

1518

1573

Buy IGL

648

633

671

695

Buy ReLInfra

607

585

641

677

Buy UPL

624

608

649

675

Buy Bata

605

589

629

654

WATCH OUT FOR:

ReL infra Long Term

Page Ind

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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