Archives : BE SCARED, BEAR CRASH THIS WEEK - 16/03/2018.

BE SCARED, BEAR CRASH THIS WEEK - 16/03/2018.

 

NIFTY TO BREAK 200DMA.

 

Nifty experienced a Pull-back in the initial part of the week and as expected the Pull-back rally was sold into. The market movement was exactly as we had mentioned in the previous article. This week again the Nifty has closed just above the 200dma and it will not be a surprise if this coveted level is broken in a day or two. The set-up smacks of strong bearishness and hence one is advised to Sell/Short on any sort of pull-backs.

 


BE SCARED, BEAR CRASH THIS WEEK - 16/03/2018.

 

NIFTY TO BREAK 200DMA.

 

Nifty experienced a Pull-back in the initial part of the week and as expected the Pull-back rally was sold into. The market movement was exactly as we had mentioned in the previous article. This week again the Nifty has closed just above the 200dma and it will not be a surprise if this coveted level is broken in a day or two. The set-up smacks of strong bearishness and hence one is advised to Sell/Short on any sort of pull-backs.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 33468, made a high of 34077, low of 33119 and closed the week at 33176. Thus it closed the week with a loss of 131 points. At the same time the Nifty opened the week at 10301, made a high of 10478, low of 10180 and closed the week at 10195. Thus the Nifty closed the week with a loss of 31 points.

 

On the daily charts, both Sensex and Nifty have formed a big Opening Black body Marubuzo, which is a strong bearish pattern. On the weekly charts, both the indices have formed a small body with a long upper shadow, which indicates selling at higher levels. On the monthly charts, Nifty has formed a Bearish Engulfing pattern. This is a Bearish Reversal pattern which can induce bearishness for the next few months. Thus candlestick analysis indicates bearishness across daily, weekly as well as monthly timeframes.

 

This week once again, both the indices despite breaking key support levels, still managed a close just above the 200dma (Sensex 32821 and Nifty 10161). The set-up suggests a break of this long term support very soon & possibly testing of Nifty 10000.

 

We are in midst of a strong Correction of the intermediate 13 months rally from low of Sensex 25717 and Nifty 7893. The Retracement levels for that are placed at Sensex 32347-31081-29815 and Nifty 9919-9533-9146. We also need to consider the last two years rally which started from a low Sensex 22494 and Nifty 6825. The relevant Correction levels are placed at Sensex 31115-29469-27823 and Nifty 9511-8999-8486. Strong confluence zone is formed between Sensex 31081-31115 and Nifty 9533-9511, which can possibly act as Target for the market.

 

Both the indices have formed a Weekly Bearish Gap between Sensex 34874-35006 and Nifty 10702-10736. This Gap is aided by 50% Retracement of the current fall (Sensex – 34963 and Nifty 10724) and also the 50% Retracement of Intermediate Rise from low of Nifty 10033 i.e. at Sensex 34962 and Nifty 10737. Thus as seen, the weekly Bearish Gap is aided by strong Resistances which will make the confluence zone into a strong Resistance zone.

 

This week, both the indices were well below the short term average of 20dma (Sensex – 33777 and Nifty - 10379) as well as medium term average of 50dma (Sensex – 34457 and Nifty – 10594). But both the indices have closed just above the long term average of 200dma (Sensex – 32821 and Nifty – 10161).  Thus the trend in short term and medium term timeframe remains bearish, whereas the trend in the long term timeframe continues to remain Bullish.

 

MACD and Price ROC are both negative and in Sell mode. RSI (37) suggests bearish momentum. ADX is at 25 suggests that the Down Trend is strong. Directional Indicators are in Sell mode as +DI remains below –DI. MFI (42) suggests Negative Money Flow. OBV continues in Sell mode. Thus Oscillators are suggesting a bearish bias for the near term.

 

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

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

9838

9955

10074

10195

10276

10398

10478

Sensex

31797

32247

32699

33176

33482

33849

34167

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell Maruti

8677

8875

8370

8043

Sell Grasim

1094

1119

1056

1016

Sell ContCorp

1209

1235

1169

1125

Sell IBulHsgFin

1207

1232

1169

1129

Sell Tata SteeL

600

615

577

553

 

WATCH OUT FOR:

 

Tata Steel
 
ConCorp
 
 
 
 
 
 
 
 
 

 

 

 

 


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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