Archives : UPTREND CONTINUES - 02/06/2017.

UPTREND CONTINUES - 02/06/2017.

 

Please note that the next weekly article update will be directly on 16/02/2017.

 

GOLDEN RATIO TARGET ACHIEVED.

 

The Bulls are in no mood to let go off this opportunity of tightening the screws on the Bears and hence are pouncing on every small dips to create long positions. Every minor decline gives a hope of a Correction but the Correction continues to elude not only the Bears but also market participants who have not been able to participate in the current rally and are sitting on the sidelines. This week, the indices achieved golden ratio target of the intermediate Rounding Bottom formation which was at Sensex 31153 and Nifty 9630.

 

 


UPTREND CONTINUES - 02/06/2017.

 

Please note that the next weekly article update will be directly on 16/02/2017.

 

GOLDEN RATIO TARGET ACHIEVED.

 

The Bulls are in no mood to let go off this opportunity of tightening the screws on the Bears and hence are pouncing on every small dips to create long positions. Every minor decline gives a hope of a Correction but the Correction continues to elude not only the Bears but also market participants who have not been able to participate in the current rally and are sitting on the sidelines. This week, the indices achieved golden ratio target of the intermediate Rounding Bottom formation which was at Sensex 31153 and Nifty 9630.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 30944, made a high of 31332, low of 30869 and closed the week at 31273. Thus it closed the week with a gain of 245 points. At the same time the Nifty opened the week at 9560, made a high of 9673, low of 9547 and closed the week at 9653. Thus the Nifty closed the week with a gain of 58 points.

 

On the daily charts, Sensex has formed a white body candle which is smaller than a real body candle, whereas Nifty has formed a Doji. On the weekly charts, both the indices have formed a bullish white body candle in line with the bullish trend. Thus daily as well as weekly candlestick patterns suggest a bullish bias in the near term.

 

This week, both the indices achieved the golden ratio target (Sensex – 31153 and Nifty 9630) of Saucer formation. The Saucer pattern was completed when the indices closed above Sensex 29077 and Nifty 8968. The complete pattern target which is at Sensex 32437 and Nifty 10043 remains to be achieved. 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.

 

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.

 

MACD and Price ROC are both positive and continue in Buy mode. RSI (71) suggests very strong Bullish momentum. Stochastic Oscillator %K (91) has just gone below %D and hence in Sell 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 (65) suggests Positive Money Flow. OBV continues to make higher top, higher bottom formation. Bollinger Band continues with last week’s Buy signal. Thus Oscillators are suggesting a bullish bias.

 

This week, both the indices continued to remain above the short term average of 20dma (Sensex – 30592 and Nifty – 9480), the medium term average of 50dma (Sensex – 30030 and Nifty – 9312) and even the long term average of 200dma (Sensex – 28286 and Nifty – 8742). 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 9700 and highest Put build-up is at 9400. Thus Options data suggests a trading range with resistance coming in at 9700 and support at 9400.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

9367

9456

9550

9653

9744

9823

9915

Sensex

30366

30639

30962

31273

31562

31889

32223

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy CEAT

1851

1809

1914

1979

Buy HDFC

1604

1576

1646

1689

Buy IndusInd

1514

1483

1561

1609

Buy MuthootFin

428

417

445

463

Buy KajariaCer

713

698

736

761

 

WATCH OUT FOR:

 

Muthoot Fin
 

 

 

 

 

 

 

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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