Archives : BEARS MAKE MERRY - 23/12/2016.

BEARS MAKE MERRY - 23/12/2016.

NIFTY BELOW 8000.

As expected the Bears continued to make merry this Christmas; not only were major support levels breached but trends across all timeframes have turned down. Both the indices are now trading near their intermediate bottoms of Sensex 25717 and Nifty 7916. A break of the above mentioned levels will spell doom for the bulls as we will be staring at a much steeper downside (Nifty target of 7283 – 6867). The question being asked is whether these levels will hold or not? The answer seems to be favouring the bears as the oscillators are indicating a break of this level, but at the same time one cannot rule out a pull-back before breaking the above mentioned intermediate bottoms.


BEARS MAKE MERRY - 23/12/2016.

NIFTY BELOW 8000.

As expected the Bears continued to make merry this Christmas; not only were major support levels breached but trends across all timeframes have turned down. Both the indices are now trading near their intermediate bottoms of Sensex 25717 and Nifty 7916. A break of the above mentioned levels will spell doom for the bulls as we will be staring at a much steeper downside (Nifty target of 7283 – 6867). The question being asked is whether these levels will hold or not? The answer seems to be favouring the bears as the oscillators are indicating a break of this level, but at the same time one cannot rule out a pull-back before breaking the above mentioned intermediate bottoms.

TECHNICALLY SPEAKING.

Sensex opened the week at 26505, made a high of 26505, low of 25872 and closed the week at 26040. Thus it closed the week with a loss of 449 points. At the same time the Nifty opened the week at 8126, made a high of 8132, low of 7942 and closed the week at 7985. Thus the Nifty closed the week with a loss of 154 points.

On the daily and weekly charts, both Sensex and Nifty have formed small white body Spinning Top. On the weekly charts, both the indices have formed an Opening Black Body Marubuzo which is in continuation of the downtrend. Thus more than daily, weekly candlestick patterns indicate a bearish bias in the near term.

This week, both the indices breached strong supports and have closed at much lower levels. The indices have reached a critical support in the form of intermediate low of Sensex 25717 and Nifty 7916. A break below this level will complete Bearish Head and Shoulders pattern and the target as per that falls at a minimum of Sensex - 23794 and Nifty – 7283 and on the higher side at Sensex – 22404 and Nifty – 6867.

As per Pattern analysis, both the indices had already formed a Bearish Rising Wedge formation and the extended target as per that formation falls at Sensex 25073 and Nifty 7656.

The current fall is a Retracement of the entire rise from Sensex 22494 to 29077 and Nifty from 6825 to 8968. Thus, the relevant Correction levels are placed at Sensex 26562-25786-25009 and Nifty 8150-7897-7644.

MACD and Price ROC are negative and are in Sell mode. RSI (36) suggests continuation of bearish momentum. Stochastic Oscillator %K (07) is below %D, indicating a continuation in Sell mode. Bollinger band has given a fresh Sell on Thursday when it closed below the lower Bollinger Band. ADX is at 38 which suggest that downward trend is still strong. Directional Indicators continue in Sell mode as +DI remains below –DI. MFI (30) suggests Negative Money Flow. OBV continues in Sell mode, making lower Top, lower Bottom formation. Thus majority of Oscillators are suggesting a bearish bias in the near term.

This week, both the indices remained below the short term average of 20dma (Sensex – 26418 and Nifty – 8136), medium term average of 50dma (Sensex – 26908 and Nifty – 8304) and the even the long term average of 200dma (Sensex – 26830 and Nifty – 8246). Thus the trend in the short term, medium term and even the long term timeframe remains bearish.

Options data for December series indicate highest Call Open Interest build-up at the strike of 8300 and highest Put build-up remains at 8000. Thus Options data suggests a wide trading range with resistance coming in at 8300 and support at 8000.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7678

7777

7890

7985

8077

8185

8274

Sensex

25061

25351

25717

26040

26407

26769

27061

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell UltraTech

3107

3183

2993

2877

Sell Siemens

1071

1097

1032

991

Sell JubFood

785

805

755

724

Sell AxisBank

438

448

423

407

Sell NCC

78

80

74

69

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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