Archives : FURTHER RALLY ONLY SENSEX 32580 - 28/07/2017.

 FURTHER RALLY ONLY ABOVE SENSEX 32580 - 28/07/2017.

CONFLUENCE ZONE FOR TARGETS 10100-10400.

 

Not only did the Nifty enter the much awaited 5-digit club this week, but also managed to close the week above that. Nifty entered the confluence zone (10100-10400) formed by various targets and in the process achieved the long term Bullish Saucer target. Interestingly, both the indices are facing a stiff Resistance in the form of upward sloping Trendline which is at Sensex – 32580 and Nifty – 10055. In the short term the upward movement of the indices will be challenged as it will not only face strong Trendline Resistance and the confluence zone of targets, but also the momentum oscillators have entered overbought zone.

 


FURTHER RALLY ONLY ABOVE SENSEX 32580 - 28/07/2017.

 

CONFLUENCE ZONE FOR TARGETS 10100-10400.

 

Not only did the Nifty enter the much awaited 5-digit club this week, but also managed to close the week above that. Nifty entered the confluence zone (10100-10400) formed by various targets and in the process achieved the long term Bullish Saucer target. Interestingly, both the indices are facing a stiff Resistance in the form of upward sloping Trendline which is at Sensex – 32580 and Nifty – 10055. In the short term the upward movement of the indices will be challenged as it will not only face strong Trendline Resistance and the confluence zone of targets, but also the momentum oscillators have entered overbought zone.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 32100, made a high of 32672, low of 32058 and closed the week at 32309. Thus it closed the week with a gain of 281 points. At the same time the Nifty opened the week at 9936, made a high of 10114, low of 9919 and closed the week at 10014. Thus the Nifty closed the week with a gain of 99 points.

 

On the weekly charts, both Sensex and Nifty has formed a small white body candle with an upper shadow. The upper shadow is not big enough to get the candle qualified as Shooting Star. Upper shadow indicates selling at higher levels. On the daily chart, both Sensex and Nifty have formed small body candle with long lower shadow which indicates buying at lower levels. Thus daily candlestick pattern study indicates bullishness in the near term.


Sensex TrendLine Resis

 

The current rally has run into strong upward Trendline Resistance (Sensex – 32580 and Nifty – 10055) which is acting as a Supply line. Further upward rally will be possible only if the indices manage to close above this Trendline Resistance.

 

On the weekly charts, both Sensex and Nifty have completed a second degree Bullish Flag pattern, the target for which falls at Sensex - 33619 and Nifty – 10343. The above targets will be achieved as long as Sensex remains above 30680 and Nifty above 9448.

 

Both the indices continue to remain above the short term average of 20dma (Sensex – 31847 and Nifty – 9838), medium term average of 50dma (Sensex – 31357 and Nifty – 9681) and even the long term average of 200dma (Sensex - 28911 and Nifty – 8936). Thus the Trend in the short term, medium term and even the long term timeframe continues to remain Bullish.

 

The current Rally has produced two major Bullish Gaps. The first Bullish gap between Sensex 29780-29681 and Nifty 9250-9225 will not only act as Support but holds the key to intermediate trend. The second Bullish Gap which is more significant as it is also a Weekly Gap i.e. between Sensex 29356-29098 and Nifty 9060-8977 hold the key to the long term trend. 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.

 

A 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 was achieved this week. 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, both are positive and in Buy mode. RSI (72) is overbought but still suggests strong bullish momentum. Stochastic Oscillator %K (83) is below %D and hence in Sell mode. ADX has increased to 33, which suggests that the Uptrend is strong. Directional Indicators continue in Buy mode as +DI is above –DI. MFI (86) suggests Positive Money Flow. OBV continues to make higher tops and bottoms. Bollinger Band continues with its Buy signal. Thus Oscillators are suggesting a bullish bias but momentum oscillators like RSI, Stochastic and MFI continue to be overbought.

 

Options data for August series indicate highest Call Open Interest is at the strike of 10500 and highest Put build-up is at 9800. Thus Options data suggests a trading range with resistance coming in at 10500 and support at 9800.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

9709

9838

9928

10014

10114

10223

10343

Sensex

31353

31626

32037

32309

32672

33089

33362

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy IndusInd

1628

1585

1693

1759

Buy CESC

930

909

963

997

Buy Hexaware

260

254

269

279

Buy BEL

177

173

183

190

Buy GSFC

138

135

143

149

 

WATCH OUT FOR:

 

BEL Inv H&S
 
KSCL Flag

 

 

 


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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