Archives : Buy Every Decline - 12/01/2018

BUY EVERY DECLINE - 12/01/2018.

 

MARKET CONTINUES ITS BULL RUN.

 

Friday was a typical day in a classical Bull market as the uncertainty in the Indian Judiciary raised doubts and the market dipped; but that decline was bought and the market continued its upward journey to close at a new all-time high. Nifty continues its journey towards achieving the intermediate target of 10947-11030, till then every decline will be a buying opportunity. From hereon, the focus should be on stocks which are likely to be key beneficiaries in the Budget. Hence Focus should be on Rural and Agri themes.

 

 


BUY EVERY DECLINE - 12/01/2018.

 

MARKET CONTINUES ITS BULL RUN.

 

Friday was a typical day in a classical Bull market as the uncertainty in the Indian Judiciary raised doubts and the market dipped; but that decline was bought and the market continued its upward journey to close at a new all-time high. Nifty continues its journey towards achieving the intermediate target of 10947-11030, till then every decline will be a buying opportunity. From hereon, the focus should be on stocks which are likely to be key beneficiaries in the Budget. Hence Focus should be on Rural and Agri themes.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 34216, made a high of 34638, low of 34216 and closed the week at 34592. Thus it closed the week with a gain of 439 points. At the same time the Nifty opened the week at 10591, made a high of 10690, low of 10588 and closed the week at 10681. Thus the Nifty closed the week with a gain of 123 points.

 

On the daily charts, Nifty has formed a Dragon-Fly Doji whereas Sensex has formed an almost similar pattern except for a presence of a small upper shadow. This pattern can have bearish implications only if there is a bearish candle formation on Monday. On the weekly charts, both Sensex and Nifty have formed a Bullish big White body Marubuzo. Thus weekly candlestick pattern suggests a bullish bias in the near term.

 

Last week, the indices have left behind a bullish Gap between Sensex 34020-33995 and 10520-10513 on the Nifty. In the near term, this Gap will act as support.

 

When both the indices overcame their previous highs of Sensex 34137 and Nifty 10552, a Bullish Flag pattern got completed. The target as per this pattern falls at Sensex 35679 and Nifty 11030. These targets will be achieved as long as Sensex remains above 33703 and Nifty above 10404. On the daily timeframe, both the indices have also completed a Bullish Saucer formation and the target for that falls at Sensex 35165 and Nifty 10947. On the weekly timeframe, a Bullish Flag pattern has been completed and the target as per that pattern falls at Sensex 35649 and Nifty 11293. On the weekly formation, both the indices had completed a Cup and Handle formation and the targets are Sensex 37554 and Nifty 11413.

 

Last month the indices suffered a classic Bear trap. It resulted in the indices making an intermediate higher bottom at Sensex 32565 and Nifty 10033. This is the support level from where the market has bounced back. The indices need to sustain above this level for the above mentioned targets to be achieved.

 

This week, both the indices continued to stay above the short term average of 20dma (Sensex – 34003 and Nifty - 10510) as well as the medium term average of 50dma (Sensex – 33557 and Nifty – 10366). Both the indices still remain well above the long term average of 200dma (Sensex – 31876 and Nifty – 9890).  Thus the trend in short term as well as medium term timeframe is Upward, whereas the trend in the long term timeframe continues to remain Bullish.

 

MACD and Price ROC are both positive and continue in Buy mode. RSI (69) suggests continuation of Bullish momentum. Stochastic Oscillator %K (93) continues in Buy mode. The bullishness is yet to reflect in ADX as it still suggests consolidation phase. MFI (62) suggests Positive Money Flow. OBV continues in Buy mode making higher top higher bottom formation. Thus Oscillators are suggesting a bullish bias for the near term.

 

Options data for January series indicate highest Call Open Interest is at the strike of 11000 whereas the highest Put build-up has shifted higher at the strike of 10500. Thus Options data suggests a trading range with resistance at 11000 & support at 10500.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

10383

10490

10588

10681

10777

10868

10972

Sensex

33535

33865

34216

34592

34889

35283

35719

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy SRF

2008

1965

2075

2147

Buy CeaT

1975

1935

2037

2103

Buy Kiri Ind

637

623

659

683

Buy UCAL FueL

329

321

343

359

Buy GSFC

157

153

163

170

 

WATCH OUT FOR:

 

 

Kiri Ind
 
Ucal Fuel
 
Setco Auto

 

 

 

 

 

 

 

 

 

 

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