Archives : NEW HIGHS VERY SOON - 15/09/2017

NEW HIGHS VERY SOON - 15/09/2017.

 

UPTREND LACKING STRENGTH.

 

This week, Nifty came very close to overcoming the previous life high of 10137. Last three days of the week saw Nifty reaching near previous life-highs but was unsuccessful in clearing that level. The coming week may see the Nifty overcoming the previous highs but the same cannot be said about the Sensex, which is still some distance away from its previous life highs. Even if the Nifty overcomes and closes above its life-highs, the markets may not witness a strong vertical move, as there are various confluences of different targets coming in-between 10100 - 10500.



NEW HIGHS VERY SOON - 15/09/2017.

 

UPTREND LACKING STRENGTH.

 

This week, Nifty came very close to overcoming the previous life high of 10137. Last three days of the week saw Nifty reaching near previous life-highs but was unsuccessful in clearing that level. The coming week may see the Nifty overcoming the previous highs but the same cannot be said about the Sensex, which is still some distance away from its previous life highs. Even if the Nifty overcomes and closes above its life-highs, the markets may not witness a strong vertical move, as there are various confluences of different targets coming in-between 10100 - 10500.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 31798, made a high of 32356, low of 31797 and closed the week at 32272. Thus it closed the week with a gain of 585 points. At the same time the Nifty opened the week at 9971, made a high of 10131, low of 9968 and closed the week at 10085. Thus the Nifty closed the week with a gain of 151 points.

 

On the daily charts, both the indices have formed a small white body candle with small shadows which is a neutral formation. On the weekly front, both Sensex and Nifty have formed an Opening White body Marubuzo. It is a bullish pattern suggesting that the uptrend will now gather strength. Thus daily as well as weekly candlestick pattern study indicates a bullish bias in the near term.

 

Since both Sensex and Nifty are now sustaining above the critical Reversal level of Sensex 32091 and Nifty 9965, we can conclude that the Correction is now complete and now the indices are well on its way to test the previous life-time highs.

 

The indices have taken Support at the critical Trendline which is now at Sensex - 31572 and Nifty - 9854. A breach of this Trendline will push the market lower towards testing of intermediate bottom of Sensex 30680 and Nifty 9448.

 

The current Rally has produced two major Bullish Gaps. The first Bullish gap is on daily charts, between Sensex 29780-29681 and Nifty 9250-9225 will act as strong Support. The second Bullish Gap which is more critical 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.

 

This week, both the indices continued to remain above the short term average of 20dma (Sensex – 31745 and Nifty – 9927) and even the medium term average of 50dma (Sensex – 31883 and Nifty – 9917). Both the indices are above the long term average of 200dma (Sensex - 29669 and Nifty – 9187). Thus the Trend in the short term and medium term timeframe remains upwards, whereas the trend in the long term timeframe continues to remain bullish.

 

On the weekly formation, both the indices had 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 in Buy mode. RSI (62) suggests bullish momentum. Stochastic Oscillator %K (86) is below %D and hence in Sell mode. ADX has dropped further to 15, which suggests that it is in sideways trend. Directional Indicators continue in Buy mode. MFI (64) suggests Positive Money Flow. OBV continues in Buy mode. Bollinger Band has signalled a fresh buy this week. Thus Oscillators are suggesting a bullish bias.

 

Options data for September series indicate highest Call Open Interest has shifted upwards at the strike of 10200 whereas the highest Put build-up is now at 9900. Thus Options data suggests a trading range with resistance coming at 10200 & support at 9900.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

9792

9882

9988

10085

10178

10262

10343

Sensex

31220

31586

31911

32272

32672

33089

33389

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy BajajAuto

3025

2962

3120

3219

Buy DalmiaBharat

2826

2776

2901

2979

Buy Lupin

1009

990

1039

1071

Buy TataInvestment

926

906

957

989

Buy AutoAxles

882

862

913

945

 

WATCH OUT FOR:

 

Bajaj Auto Symm Triangle
 
 Auto Axle
 
 
 

 

 

 

 

 

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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