Archives : CHALLENGING THE REVERSAL ZONE - 27/04/2018.

CHALLENGING THE REVERSAL ZONE - 27/04/2018.

 

RELENTLESS BULL ONSLAUGHT.

 

A Gap-up opening on Friday saw the market overcome the Failure level (Nifty 10631) quite comfortably. As the rally progressed, the indices challenged the Reversal zone of Nifty (10702-10736), but could not overcome this level. It is now a matter of time as to when the Nifty overcomes this critical level. The onslaught by the Bulls continues to astonish as it registered 5th consecutive week of gains. Once the Reversal zone is conquered, it should not come as a surprise that the indices will then head towards their previous tops.

 


CHALLENGING THE REVERSAL ZONE - 27/04/2018.

 

RELENTLESS BULL ONSLAUGHT.

 

A Gap-up opening on Friday saw the market overcome the Failure level (Nifty 10631) quite comfortably. As the rally progressed, the indices challenged the Reversal zone of Nifty (10702-10736), but could not overcome this level. It is now a matter of time as to when the Nifty overcomes this critical level. The onslaught by the Bulls continues to astonish as it registered 5th consecutive week of gains. Once the Reversal zone is conquered, it should not come as a surprise that the indices will then head towards their previous tops.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 34493, made a high of 35065, low of 34259 and closed the week at 34969. Thus it closed the week with a gain of 554 points. At the same time the Nifty opened the week at 10592, made a high of 10719, low of 10514 and closed the week at 10692. Thus the Nifty closed the week with a gain of 128 points.

 

On the daily charts, both the indices had a gap-up opening followed by a formation of Opening White body Marubuzo. On the weekly timeframe, both Sensex and Nifty have formed a real white body candle which is for fifth consecutive week. Thus daily as well as weekly candlestick analysis suggests a bullish bias.

 

This week, both the indices negated Bearish Cup and Handle pattern on the daily charts and a Bearish Flag pattern on the weekly charts, when the Failure points for both the above patterns (Sensex 34610 & Nifty 10631), were taken out.

 

Current Upward rally commenced after taking support on the very critical level of 50 WeeksMA. It is a Pull-back of the fall from 36443 to 32483 for the Sensex and 11171 to 9951 for the Nifty. The relevant Pull-back levels are at Sensex 33996-34463-34931 and Nifty 10418-10562-10706. The Pull-Back rally is now testing the 61.8% levels. If it gets taken out, it will result in a Trend Reversal.

 

Both the indices have 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), which is a Reversal level. Thus as seen, the weekly Bearish Gap is aided by strong Resistances which will not only make the confluence zone into a strong Resistance zone, but a Reversal zone as well.

 

This week, both the indices continue to stay above the short term average of 20dma (Sensex – 34094 and Nifty 10459), medium term average of 50dma (Sensex – 33795 and Nifty – 10375) and even the long term average of 200dma (Sensex – 33186 and Nifty – 10265). Thus the trend in short term, medium term as well as in the long term timeframe continues to remain Bullish.

 

MACD and Price ROC are both positive and in Buy mode. RSI (67) suggests strong bullish momentum. ADX is at 15 suggests trend is being developed. Directional Indicators are in Buy mode as +DI is above –DI. MFI (78) suggests Positive Money Flow. OBV continues in Buy mode, making higher top higher bottom. Thus Oscillators suggest a bullish bias for the near term.

 

Options data for May series indicate highest Call Open Interest is at the strike of 11000 whereas the highest Put build-up is now 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

10398

10499

10594

10692

10782

10887

10975

Sensex

33849

34225

34591

34969

35339

35823

36256

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy MRF

80413

79060

82662

84977

Buy EicherMotors

31599

30900

32766

33889

Buy Escorts

974

951

1009

1047

AmaraRajaBatt

859

841

886

915

Buy GPiL

570

556

593

619

 

WATCH OUT FOR:

 

Amara Raja Batt
 
Bank Nifty Bullish H&S
 
 
 
 

 

 

 

 

 

 


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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