Archives : TREND TURNS BEARISH - 30/09/2016.

TREND TURNS BEARISH - 30/09/2016. 

SELL ON RISE.

Gap down opening on Monday not only created a Bearish Island but also gave a Bearish Rising Wedge breakout. Thursday formed a big black body candle which not only breached the short term support levels but also turned the short term and medium term trend into bearish. From a Buy on Declines, the market has now turned into Sell on Rise. Immediate Support zone is at Sensex 27667-27494 and Nifty 8479-8447.


TREND TURNS BEARISH - 30/09/2016.

SELL ON RISE.

Gap down opening on Monday not only created a Bearish Island but also gave a Bearish Rising Wedge breakout. Thursday formed a big black body candle which not only breached the short term support levels but also turned the short term and medium term trend into bearish. From a Buy on Declines, the market has now turned into Sell on Rise. Immediate Support zone is at Sensex 27667-27494 and Nifty 8479-8447.

TECHNICALLY SPEAKING.

Sensex opened the week at 28630, made a high of 28630, low of 27716 and closed the week at 27865. Thus it closed the week with a loss of 803 points. At the same time the Nifty opened the week at 8807, made a high of 8809, low of 8555 and closed the week at 8611. Thus the Nifty closed the week with a loss of 220 points.

On the weekly charts, both Sensex and Nifty have formed a big Opening Black body Marubuzo. On the daily charts both the indices have formed a small white body Spinning Top after a big black body candle on Thursday. The small white body only indicates a pause before the downward rally resumes. Thus daily as well as weekly charts are showing bearishness in the near term.

Mondays Gap down Opening created a second successive Bearish Island Reversal, thereby registering a Sell signal. This Signal will be negated only if we have closing above Sensex - 28871 and Nifty - 8893.

Monday also registered a Rising Wedge breakout when the price closed below the lower Trendline of the pattern. The target as per this Bearish pattern falls at Sensex 26522 and Nifty 8142. If the bearishness takes the indices below the above mentioned levels then expect extended lower targets at Sensex 25073 and Nifty 7656. The pattern will fail only if the indices close above current top of the rally i.e. above Sensex 29077 and Nifty 8968.

The current fall is a Retracement of the rise from Sensex 25911 to 29077 and Nifty from 7927 to 8968. The relevant Retracement levels are placed at Sensex 27867-27494-27120 and Nifty 8570-8447-8325. In case the Correction gets extended then we will have to check the Retracement levels of the entire rise from Sensex 22494 to 29077 and Nifty from 6825 to 8968. The relevant extended Correction levels are placed at Sensex 26562-25786-25009 and Nifty 8150-7897-7644.

Immediate Support zone is between Sensex 27667-27494 and Nifty 8479-8447 which is due to confluence of Bullish Gap between Sensex 27667-27647 and Nifty 8479-8475 and the 50% Retracement of the intermediate fall which is at Sensex 27494 and Nifty 8447. A stronger Support zone exists between Sensex 25911-25786 and Nifty 7927-7897, which is due to the confluence of Intermediate bottom (Sensex – 25911 and Nifty – 7927) and 50% Retracement of the entire rally which is at Sensex 25786 and Nifty 7897.

MACD and Price ROC are both negative and continue in Sell mode. RSI (39) suggests bearish momentum. Stochastic Oscillator %K (14) has just gone above %D giving a fresh Buy signal. Bollinger Band has given a Sell signal on Thursday. ADX has reduced to 18 which suggest that there is no clear trend. Directional Indicators continues in Sell mode as +DI remains below –DI. MFI (40) suggests Negative Money Flow. Thus Oscillators are indicating a bearish bias in the near term.

This week, both the indices easily breached and closed below the short term average of 20dma (Sensex – 28502 and Nifty – 8783) and medium term average of 50dma (Sensex – 28199 and Nifty – 8690). Both the indices continue to remain above the long term average of 200dma (Sensex – 26127 and Nifty – 7996). Thus the trend in the short term and medium term has turned bearish whereas the trend in the long term timeframe continues to remain Bullish.

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

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Reliance

1102

1137

1130

500

Rs.14,000

BhartFrg

943

975

961

600

Rs.10,800

Buy IOC

583

603

599

1500

Rs.24,000

IRBInfra

261

270

266

2500

Rs.12,500

JindSaw

55

59

60

5000

Rs.25,000

Total

Rs.86,300.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8308

8407

8518

8611

8728

8848

8968

Sensex

26713

27034

27442

27865

28251

28631

29077

 THIS WEEKS RECOMMENDATIONS: 

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell TCS

2430

2487

2344

2257

Sell BajajAuto

2827

2891

2731

2633

Sell SunPharma

743

760

717

690

Sell PidiliteInd

681

698

655

628

Sell JetAir

476

489

456

435

WATCH OUT FOR:

Nifty Rising Wedge

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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