Archives : NIFTY HEADED FOR 10537-10815 - 03/11/2017.

NIFTY HEADED FOR 10537-10815 - 03/11/2017.

 

BULLISH MOMENTUM GATHERS STRENGTH.

 

Markets are going from strength to strength even as the bulls continue their domination over the bears. Both the indices are at historic life-time high levels. As the Trend in all timeframes continues to be positive, one needs to adopt a ‘Buy on every Decline’ strategy. As the upward price movement continues, the Momentum Oscillators have moved up sharply and are in overbought territory. So there is a possibility that the market might experience some minor pull-backs but one will need to buy into those pull-backs. As per pattern formations one can expect Nifty target of 10537-10815.



NIFTY HEADED FOR 10537-10815 - 03/11/2017.

 

BULLISH MOMENTUM GATHERS STRENGTH.

 

Markets are going from strength to strength even as the bulls continue their domination over the bears. Both the indices are at historic life-time high levels. As the Trend in all timeframes continues to be positive, one needs to adopt a ‘Buy on every Decline’ strategy. As the upward price movement continues, the Momentum Oscillators have moved up sharply and are in overbought territory. So there is a possibility that the market might experience some minor pull-backs but one will need to buy into those pull-backs. As per pattern formations one can expect Nifty target of 10537-10815.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 33260, made a high of 33733, low of 33164 and closed the week at 33685. Thus it closed the week with a gain of 528 points. At the same time the Nifty opened the week at 10353, made a high of 10461, low of 10323 and closed the week at 10452. Thus the Nifty closed the week with a gain of 129 points.

 

On the daily charts, Sensex has formed a small white body Spinning Top whereas Nifty has formed a Hanging Man pattern. Both will require confirmation in the form of a real bearish candle on Monday to confirm price reversal. On the weekly charts, both the indices have formed a real Bullish White body candle. Thus weekly candlestick study indicates continuation of Bullishness but daily study indicates slight bearishness.

 

Last week saw both the indices creating one more Bullish Gap between 33340-33294 for the Sensex and 10383-10367 for the Nifty. This is the second Bullish Gap in last two weeks. Besides acting as strong Support, this Gap can also be considered as a Measuring Gap. Thus as per Gap theory, the target falls at Sensex 34322 and 10627 for the Nifty.

 

Two weeks back saw both the indices completing a Bullish Flag pattern. The target as per this pattern falls at Sensex 34317 and Nifty 10851. These targets will be achieved as long as the Sensex and Nifty remain above 32312 and 10123 respectively.

 

The key level to watch out for in this entire upward rally is the support taken at the higher bottom which is at Sensex 31128 and Nifty 9685. A break of this support will interrupt the higher top higher bottom formation sequence for the indices for the first time since December 2016. As a result, we will be looking at the Correction of the entire rally which started from Sensex 25717 and 7896 for the Nifty.

 

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 positive and in Buy mode. RSI (71) suggests bullish momentum. ADX has increased to 21, which suggests uptrend getting developed. Directional Indicators continue in Buy mode. MFI (85) suggests Positive Money Flow. OBV continues to make higher top higher bottom formation. Thus Oscillators are suggesting a bullish bias for the near term, but more interestingly all momentum oscillators are in overbought zone and hence one can expect some cool-off or a minor dip in the near term.

 

This week, both the indices continue to remain not only above the short term average of 20dma (Sensex – 32702 and Nifty – 10221) and the medium term average of 50dma (Sensex – 32162 and Nifty – 10056), but also the long term average of 200dma (Sensex - 30632 and Nifty – 9509).  Thus the trend in short term, medium term as well as the long term timeframe continues to remain Bullish.

 

Options data for November series indicate highest Call Open Interest is at the strike of 10500 whereas the highest Put build-up is at 10000. Thus Options data suggests a trading range with resistance coming at 10500 & support at 10000.

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Century Textiles

1411

1378

1462

1515

Buy Sun TV

881

864

907

934

Buy Auro Pharma

787

770

813

840

Buy Thirumalai Chem

1950

1903

2024

2103

Buy Munjal Showa

291

283

304

319

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

10123

10251

10367

10452

10536

10662

10778

Sensex

32396

32804

33254

33685

33967

34317

34677

 

WATCH OUT FOR:

 

Aurobindo Pharma
 
Munjal Showa

 

 

 

 

 

 

 

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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