Archives : FOOLING THREE CROWS - 26/05/2017.

FOOLING THREE CROWS - 26/05/2017.

 

SENSEX ABOVE 31000.

 

The current rally of 1700 Nifty points has hardly witnessed any substantial correction, neither time-wise or price-wise. Just when it seemed that we might witness a healthy correction, the Bulls led the charge and took the market to new life-highs again. Nifty has touched 9600 and Sensex has closed above 31000 for the week. Thus the Correction seems elusive for now and market participants, who have been feeling left out of this strong Bull rally, will continue to feel the same for some more time.

 

 


FOOLING THREE CROWS - 26/05/2017.

 

SENSEX ABOVE 31000.

 

The current rally of 1700 Nifty points has hardly witnessed any substantial correction, neither time-wise or price-wise. Just when it seemed that we might witness a healthy correction, the Bulls led the charge and took the market to new life-highs again. Nifty has touched 9600 and Sensex has closed above 31000 for the week. Thus the Correction seems elusive for now and market participants, who have been feeling left out of this strong Bull rally, will continue to feel the same for some more time.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 30638, made a high of 31074, low of 30247 and closed the week at 31028. Thus it closed the week with a gain of 564 points. At the same time the Nifty opened the week at 9480, made a high of 9604, low of 9341 and closed the week at 9595. Thus the Nifty closed the week with a gain of 168 points.

 

On the daily charts, both the indices have formed big white body candles on Thursday and Friday. Both Sensex and Nifty completed a Fooling Three Crows formation on Thursday when a big white body candle was formed such that it closed above the high of last three days real black body candles. It is a Bullish Continuation formation which suggests that the market participants were fooled into believing the formation of Three Black Crows but the single big White body on Thursday removed that bearishness. On the weekly charts, both the indices have formed a real White body candle which is almost very close to being called a Closing White body Marubuzo. Thus daily as well as weekly candlestick patterns suggest a strong bullish bias in the near term.

 

Both the indices had left behind a bullish gap between Sensex 29780-29681 and Nifty 9250-9225. This gap was tested and it successfully acted as Support. Thus a break of this Support will turn the short and medium 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 intermediate 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 is positive and is giving a fresh Buy signal. Price ROC is positive and continues with its Buy signal. RSI (68) suggests strong Bullish momentum. Stochastic Oscillator %K (74) is above %D and hence in Buy mode. ADX is at 29 which suggest that the Uptrend is still strong. Directional Indicators continue in Buy mode as +DI remains above –DI. MFI (63) suggests Positive Money Flow. OBV has once again started to make higher top, higher bottom formation. Bollinger Band has given a fresh Buy on Friday. Thus Oscillators are suggesting a bullish bias.

 

This week, both the indices tested the short term average of 20dma (Sensex – 30287 and Nifty – 9403) and managed to close above that. Both Sensex and Nifty continue to remain above the medium term average of 50dma (Sensex – 29867 and Nifty – 9262) and even the long term average of 200dma (Sensex – 28206 and Nifty – 8718). Thus the trend in the short term, medium term and even the long term timeframe continues to remain upwards.

 

Options data for June series indicate highest Call Open Interest is at the strike of 9600 and highest Put build-up is at 9400. Thus Options data suggests a trading range with resistance coming in at 9600 and support at 9400.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

9309

9414

9505

9595

9662

9753

9839

Sensex

30007

30363

30712

31028

31339

31662

31944

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Maruti

7064

6944

7245

7429

Buy Tata SteeL

511

498

531

553

Buy BPCL

749

733

773

799

Buy ITC

309

302

320

332

Buy BalramChini

167

163

173

180

 

WATCH OUT FOR:

 

Tata Steel
 
 

 

 

 

 

 

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