Archives : MID-CAPS OUTPERFORM NIFTY - 19/08/2016.

MID-CAPS TO OUTPERFORM - 20/08/2016.

RANGE BREAKOUT IN COMING WEEK.

Both Sensex and Nifty continued to trade in a very tight range but the broader market outperformed both these indices handsomely. In fact, the Mid-Cap index broke out of the trading range and is progressing upwards. The Nifty on the other hand has been in a small trading range of 250 points (8728-8476) for more than six weeks now and as per the Principle of Volatility, one can expect a breakout (bias remains positive) in this trading range in the near future, possibly as early as next week.


MID-CAPS TO OUTPERFORM - 20/08/2016.

RANGE BREAKOUT IN COMING WEEK.

Both Sensex and Nifty continued to trade in a very tight range but the broader market outperformed both these indices handsomely. In fact, the Mid-Cap index broke out of the trading range and is progressing upwards. The Nifty on the other hand has been in a small trading range of 250 points (8728-8476) for more than six weeks now and as per the Principle of Volatility, one can expect a breakout (bias remains positive) in this trading range in the near future, possibly as early as next week.

TECHNICALLY SPEAKING.

Sensex opened the week at 28190, made a high of 28214, low of 27942 and closed the week at 28077. Thus it closed the week with a loss of 75 points. At the same time the Nifty opened the week at 8670, made a high of 8696, low of 8600 and closed the week at 8666. Thus the Nifty closed the week with a minor loss of 6 points.

On the daily charts, both Sensex and Nifty have formed a small black body candle which has been formed in sideways consolidation and has little significance. On the weekly charts, both Sensex and Nifty have formed a Doji which is a neutral formation. Interestingly, last three weeks can be considered almost like a Tri-Star formation. In this case, it is a bearish formation which will require confirmation in the form of a bearish candle next week. Thus daily and weekly candlestick study does not give a very clear conclusion.

This is the sixth week, that both the indices continued to trade in a range of Sensex 28289-27627 and Nifty 8728 – 8476. On the lower side, the trading range is supported by the Bullish Gap between Sensex 27667-27647 and Nifty 8479-8475. This Gap acted as a strong support for four times and hence it becomes a very critical Support in the near term. If the range is broken on the upper side, expect the Flag pattern target (Nifty 8869) immediately and then towards the life time highs.

On a higher timeframe a very strong Support exists in the form of Bullish Weekly Gap between Sensex 27358-27294 and Nifty 8407-8398. This Weekly Bullish Gap 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.

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 remains above 27034 and Nifty above 8287.

MACD continues in Sell mode despite being in positive zone. Price ROC has just turned positive and has signalled a Buy. RSI (56) suggests bullish momentum. Stochastic Oscillator %K (64) is above %D and hence continues in Buy mode. ADX has dropped to 23 which suggest that Uptrend is still intact. Directional Indicators continue in Buy mode as +DI is above –DI. MFI (35) suggests Negative Money Flow. Thus Oscillators are projecting a mixed picture in the near term, with no clear bias.

This week again, both the indices tested the short term average of 20dma (Sensex – 27998 and Nifty – 8628) but managed to hold and close above it. Both the indices continue to remain well above the medium term average of 50dma (Sensex – 27453 and Nifty – 8436) and even the long term average of 200dma (Sensex – 25799 and Nifty – 7875). Thus the trend in the short term, medium term and even the long term timeframe continues to remain Bullish.

Options data for August series indicate highest Call Open Interest build-up at the strike of 8800 and highest Put build-up at 8500. Thus Options data suggests a trading range with resistance coming in at 8800 and support at 8500.

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy YesBk

1290

1328

1339

700

Rs.34,300

Buy CESC

639

662

664

1100

Rs.27,500

LiCHsg

554

574

563

1100

Rs. 9,900

Buy SBI

243

254

260

3000

Rs.51,000

AdaniPort

258

269

278

2500

Rs.50,000

Total

Rs.1,72,700.

.
INDEX LEVELS:
.

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8398

8476

8584

8666

8788

8891

8996

Sensex

27060

27358

27697

28077

28417

28822

29183

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy TataComm

504

495

519

535

Buy CairnInd

211

205

220

230

Buy AllahabadBk

79

77

83

87

Buy TataPower

78

76

82

86

Buy SaiL

49

47

53

57

WATCH OUT FOR:

Tata Comm

TATA CHEM

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.

Copyright © 2000 - 2018 Jatin Sanghavi. All rights reserved.
No part of the material on this website may be reproduced or distributed in any forms or by any means, electronics or mechanical without the written permission of the author.
Sitemap