Archives : NOT OUT OF THE WOODS, YET - 28/03/2018

NOT OUT OF THE WOODS, YET - 28/03/2018.

 

PULL-BACK - A POSSIBILITY.

 

Both the indices have formed a Tweezer bottom on the weekly timeframe. Coupled with the Tweezer formation, both the indices have managed to take support at the very important level of 50 WeeksMA. The formation sets the stage for a pull-back from the current levels, until the low of 9951 on the Nifty is broken. One can expect a choppy market with clear direction missing and money making will become increasingly difficult. Pull-back levels are placed at 10418-10562-10706 for the Nifty.

 


NOT OUT OF THE WOODS, YET - 28/03/2018.

 

PULL-BACK - A POSSIBILITY.

 

Both the indices have formed a Tweezer bottom on the weekly timeframe. Coupled with the Tweezer formation, both the indices have managed to take support at the very important level of 50 WeeksMA. The formation sets the stage for a pull-back from the current levels, until the low of 9951 on the Nifty is broken. One can expect a choppy market with clear direction missing and money making will become increasingly difficult. Pull-back levels are placed at 10418-10562-10706 for the Nifty.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 32536, made a high of 33371, low of 32515 and closed the week at 32968. Thus it closed the week with a gain of 372 points. At the same time the Nifty opened the week at 9989, made a high of 10207, low of 9958 and closed the week at 10113. Thus the Nifty closed the week with a gain of 115 points.

 

On the daily charts, both the indices have formed a small black body candle after a gap down opening. On the weekly charts, both Sensex and Nifty formed a white body candle which falls short of being a Harami but it forms a Tweezer Bottom along with previous week’s candle. On the monthly charts, both the indices have formed a Bearish candle after the formation of Bearish Engulfing pattern last month. Thus candlestick analysis indicates bearishness across daily, weekly as well as monthly timeframes.

 

For two consecutive weeks, both Sensex and Nifty have managed to seek support on the very critical level of 50 WeeksMA (Sensex – 32498 & Nifty 10060). As long as the indices continue to close above the 50 WeeksMA, there is little to worry about the downside and probably a pull-back rally may ensue.

 

If the Pull-back rally ensues, then one can consider a Retracement of the fall from 36443 to 32483 for the Sensex and 11171 to 9951 for the Nifty. The relevant Pull-back levels are placed at Sensex 33996-34463-34931 and Nifty 10418-10562-10706.

 

In the near term, the indices will face Resistance in the form of Trendline Resistance which falls at Sensex 33304 and Nifty 10271.

 

Both the indices have completed a Bearish Cup and Handle pattern on the daily charts and whose target falls at Sensex 30521 and 9381. On the weekly charts, both the indices have formed a Bearish Flag pattern with similar targets.

 

We are in the 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 61.8% Retracement of the current fall (Sensex – 34931 and Nifty 10706). 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 closed below the long term average of 200dma (Sensex – 32892 and Nifty – 10180).  Besides they continue to stay well below the short term average of 20dma (Sensex – 33366 and Nifty - 10245 as well as medium term average of 50dma (Sensex – 34249 and Nifty – 10518). Thus the trend in short term and medium term timeframe remains bearish, whereas the trend in the long term timeframe is also Bearish.

 

MACD and Price ROC are both negative and in Sell mode. RSI (40) suggests bearish momentum. ADX is at 27 suggests that the Down Trend is getting strong. Directional Indicators are in Sell mode as +DI remains below –DI. MFI (41) suggests Negative Money Flow. OBV continues in Sell mode. Thus Oscillators are suggesting a bearish bias for the near term.

 

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

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell DrReddy

2081

2123

2018

1954

Sell Infosys

1132

1156

1095

1056

Sell Grasim

1051

1073

1018

983

Sell Siemens

1073

1097

1035

995

Sell SunTV

849

871

815

778


INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

9861

9951

10033

10113

10227

10329

10428

Sensex

31769

32247

32595

32968

33354

33770

34077

 

WATCH OUT FOR:

 

Sun TV
 
 

 

 

 

 

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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