Archives : ONCE AGAIN, WEEKLY GAP AS SUPPORT - 31/03/2017.

ONCE AGAIN, WEEKLY GAP AS SUPPORT - 31/03/2017.

 

HIGHEST WEEKLY CLOSING FOR NIFTY.

Nifty has registered highest weekly closing for the last week of the current financial year. The year saw the market overcoming some very strong hurdles in the form of bearish news flows, locally (read demonetization) as well as globally (read Brexit, Trump win). Despite all possible hurdles, the financial year has ended on a high note, thereby providing lot of optimism for the next financial year. Market participants should not be surprised if the Nifty reaches five digits in the next financial year. In the very short term, the Bullish Weekly Gap (Sensex 29356-29098 and Nifty 9060-8977) has supported the market second week running and hence it will act as strong support in the near term.

 


ONCE AGAIN, WEEKLY GAP AS SUPPORT - 31/03/2017.

 

HIGHEST WEEKLY CLOSING FOR NIFTY.

 

Nifty has registered highest weekly closing for the last week of the current financial year. The year saw the market overcoming some very strong hurdles in the form of bearish news flows, locally (read demonetization) as well as globally (read Brexit, Trump win). Despite all possible hurdles, the financial year has ended on a high note, thereby providing lot of optimism for the next financial year. Market participants should not be surprised if the Nifty reaches five digits in the next financial year. In the very short term, the Bullish Weekly Gap (Sensex 29356-29098 and Nifty 9060-8977) has supported the market second week running and hence it will act as strong support in the near term.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 29395, made a high of 29687, low of 29163 and closed the week at 29620. Thus it closed the week with a gain of 199 points. At the same time the Nifty opened the week at 9093, made a high of 9191, low of 9024 and closed the week at 9173. Thus the Nifty closed the week with a gain of 65 points.

 

On the daily charts, Nifty has formed a small white body candle in line with the uptrend whereas Sensex has formed a Harami Cross which is bearish pattern but it requires confirmation in the form of a real black body candle on Monday. On the weekly charts, both the indices have formed a Bullish Engulfing pattern but this pattern cannot be termed as valid as it has occurred in an uptrend. Hence both daily and weekly candlestick study suggests a minor bullish bias in the near term.

 

Once again this week, both the indices took support at the powerful weekly gap i.e. between Sensex 29356-29098 and Nifty 9060-8977. For the second week running, the market bounced back from this Gap. This gap will not only act as strong support in the days to come, but is also act as a Measuring Gap. The target as per Gap theory falls at Sensex 32737 and Nifty 10144.

 

On the daily charts, both Sensex and Nifty have formed a Pennant formation. The target as per the pattern falls at Sensex 30399 and Nifty 9252.

 

Since the indices have managed a close above Sensex 29077 and Nifty 8968, both the indices have completed a Saucer formation on the daily charts. The target as per this pattern falls at Sensex 31153-32437 and Nifty 9630-10043. On the weekly formation, both the indices have completed a Cup and Handle formation and the targets are Sensex 34677-37554 and Nifty 10536-11413.

 

If one considers the Cup and Handle formation of 7 years from 2007 to 2014, the target for that pattern falls at Sensex 34715 and Nifty 10462. The Golden Ratio target of the current pattern weekly pattern of 2 years is at Sensex 34677 and Nifty 10536. Thus in the medium term one can expect a test of the above targets i.e. Sensex 34677-34715 and Nifty 10462-10536.

 

MACD despite being in positive zone continues in Sell mode. Price ROC continues to remain positive and in Buy mode. RSI (66) suggests Bullish momentum. Stochastic Oscillator %K (80) continues in Buy mode. ADX is at 38 which suggest that the Uptrend is very strong. Directional Indicators continue in Buy mode as +DI remains above –DI. MFI (67) suggests Positive Money Flow. OBV continues in Buy mode and continues to make higher top, higher bottom formation. Bollinger Band continues in Buy mode since January. Thus majority of the Oscillators are suggesting a continuation of bullishness in the near term.

 

This week, both the indices continued to remain above the short term average of 20dma (Sensex – 29305 and Nifty – 9059), medium term average of 50dma (Sensex – 28636 and Nifty – 8859) and even the long term average of 200dma (Sensex – 27710 and Nifty – 8546). Thus the trend in the short term, medium term and even the long term timeframe continues to remain upwards.

 

Options data for April series indicate highest Call Open Interest build-up at the strike of 9200 and highest Put build-up has shifted higher at 9000. Thus Options data suggests a small trading range with resistance coming in at 9200 and support at 9000.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8891

8992

9087

9173

9252

9339

9443

Sensex

28716

29076

29341

29620

30024

30399

30779

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Eicher Motors

25587

25050

26395

27238

Buy BemL

1362

1333

1407

1453

Buy RiL

1320

1291

1365

1413

Buy STFC

1078

1054

1114

1151

Buy Indian Bank

278

272

287

298

 

WATCH OUT FOR:

 

 

EicherMotor

 

 

 

SBI
 
 

 

 

 

 

 

  

 

 

 

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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