Archives : SUPPORT HOLDS; RALLY CONTINUES - 12/05/2017.

SUPPORT HOLDS; RALLY CONTINUES - 12/05/2017.

 

EVERY DECLINE BEING BOUGHT.

 

The market continues its upward journey feeding on every minor decline and an increasing feeling of being ‘left out’. Bulls continue to feed on pessimism as they continue to use minor dips for buying and thereby strengthening the Uptrend. A strong Support exists at the Bullish Gap between 9250-9225. A break of this Support will turn the short term trend down and then the market will enter into a Correction mode. Till then, every dip should be treated as a buying opportunity.

 

 


SUPPORT HOLDS; RALLY CONTINUES - 12/05/2017.

 

EVERY DECLINE BEING BOUGHT.

 

The market continues its upward journey feeding on every minor decline and an increasing feeling of being ‘left out’. Bulls continue to feed on pessimism as they continue to use minor dips for buying and thereby strengthening the Uptrend. A strong Support exists at the Bullish Gap between 9250-9225. A break of this Support will turn the short term trend down and then the market will enter into a Correction mode. Till then, every dip should be treated as a buying opportunity.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 29915, made a high of 30366, low of 29877 and closed the week at 30188. Thus it closed the week with a gain of 330 points. At the same time the Nifty opened the week at 9311, made a high of 9450, low of 9297 and closed the week at 9400. Thus the Nifty closed the week with a gain of 115 points.

 

On the daily charts, both the indices have formed a small body black candle with a longer lower shadow. On the weekly charts, both Sensex and Nifty have formed an Opening white body Marubuzo. It has a real body but not a big body. Thus candlestick study indicates a bullish bias in the near term.

 

Two weeks back, both the indices had left behind a bullish gap between Sensex 29780-29681 and Nifty 9250-9225. This gap was tested last week and it successfully acted as Support. Thus a break of this Support will turn the short term trend to bearish.

 

In the previous fall, the market went down to test the strong support in the form of the weekly gap i.e. between Sensex 29356-29098 and Nifty 9060-8977. This gap provided support and the indices recovered from that level. This Gap is now very significant as a break of this Gap will turn the medium term trend to bearish. Besides acting as a support, this gap also acts as a Measuring Gap. The target as per Gap theory falls at Sensex 32737 and Nifty 10144.

 

When the indices closed above Sensex 29077 and Nifty 8968, both Sensex and Nifty 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 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 and Price ROC are both positive and continue with their Buy signals. RSI (65) suggests Bullish momentum. Stochastic Oscillator %K (91) is in Buy mode. ADX is at 35 which suggest that the Uptrend is still strong. Directional Indicators continue in Buy mode as +DI remains above –DI. MFI (78) suggests Positive Money Flow. OBV has once again started to make higher top, higher bottom formation. Buy signal continues in Bollinger Band. Thus majority of Oscillators are suggesting a positive bias.

 

This week, both the indices maintained above the short term average of 20dma (Sensex – 29817 and Nifty – 9270), the medium term average of 50dma (Sensex – 29550 and Nifty – 9158) and even the long term average of 200dma (Sensex – 28076 and Nifty – 8674). Thus the trend in the short term, medium term and even the long term timeframe continues to remain upwards.

 

Options data for May series indicate highest Call Open Interest has shifted higher at the strike of 9500 and highest Put build-up is now shifted higher at 9300. Thus Options data suggests a trading range with resistance coming in at 9500 and support at 9300.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

9133

9217

9305

9400

9493

9578

9662

Sensex

29077

29442

29823

30188

30556

30889

31223

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Page Ind

14930

14662

15339

15778

Buy PEL

2599

2534

2699

2803

Buy M&M

1367

1341

1407

1439

Buy HUL

980

960

1010

1043

Buy TVS Motors

516

504

534

553

 


WATCH OUT FOR:

 

M&M
 

 

Motherson Sumi

 

 

 


 

 

 

 

 

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