Archives : PAIN STILL LEFT - 08/06/2018

PAIN STILL LEFT - 08/06/2018.

 

MID-CAPS SEE SOME RELIEF.

 

It was a week where Volatility and Uncertainty ruled over everything else. After witnessing a sharp fall on Monday and Tuesday, both Sensex and Nifty staged a recovery after taking support at the 50dma. Both the Frontline indices are faring well but the problem has been the Mid-caps and Small-caps. Mid-cap 50 Index (5018) took support at the low around 4790 from where it has already witnessed two recoveries. Frontline indices bounced back around 2% from those levels whereas Mid-cap 50 bounced back around 4%. The fall witnessed in Mid-cap and Small-cap indices can be classified as Carnage and the bounce-back was not only expected but also very much needed. In fact the bounce-back is just a relief and cannot be termed as a Reversal, which will happen only if Mid-cap 50 surpasses 5365.

 


PAIN STILL LEFT - 08/06/2018.

 

MID-CAPS SEE SOME RELIEF.

 

It was a week where Volatility and Uncertainty ruled over everything else. After witnessing a sharp fall on Monday and Tuesday, both Sensex and Nifty staged a recovery after taking support at the 50dma. Both the Frontline indices are faring well but the problem has been the Mid-caps and Small-caps. Mid-cap 50 Index (5018) took support at the low around 4790 from where it has already witnessed two recoveries. Frontline indices bounced back around 2% from those levels whereas Mid-cap 50 bounced back around 4%. The fall witnessed in Mid-cap and Small-cap indices can be classified as Carnage and the bounce-back was not only expected but also very much needed. In fact the bounce-back is just a relief and cannot be termed as a Reversal, which will happen only if Mid-cap 50 surpasses 5365.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 35503, made a high of 35628, low of 34784 and closed the week at 35443. Thus it closed the week with a gain of 216 points. At the same time the Nifty opened the week at 10765, made a high of 10818, low of 10550 and closed the week at 10767. Thus the Nifty closed the week with a gain of 71 points.

 

On the daily charts, both the indices have formed a small white body candle on Friday, which along with Thursdays candle is forming Side by Side White Lines which is Bullish Continuation pattern. On the weekly charts, both the indices have formed a Doji formation which can be considered as neutral. Thus daily as well as weekly candlestick pattern formation suggests a bullish bias in the near term.

 

Few weeks back, both the indices completed a Bullish Rounding Bottom pattern on the daily charts. It is a Bullish pattern and the target as per that falls at Sensex 36737 and Nifty 11311.

 

Mid-Cap 50 Index (5018) staged a smart recovery after taking support at the 4790 levels from where two previous bounces had been witnessed. Last three days of the week, saw the Mid-Cap 50 index recover almost 4%. It will face strong Resistance Zone at 5123-5145 which is due to the confluence of 200dma and Retracement levels. A Trend Reversal will occur only if Mid-Cap 50 closes above 5365.

 

Both the indices had a Weekly Bearish Gap between Sensex 34874-35006 and Nifty 10702-10736. This Gap was aided by 61.8% Retracement of the current fall (Sensex – 34931 and Nifty 10706), which is a Reversal level. This week, both the indices have closed not only above the Weekly Bearish Gap but also above their Reversal level of Sensex 34931 and Nifty 10706. Thus if it remains above the Reversal zone, then the indices will target the previous top.

 

This week, both the indices tested both the short term average of 20dma (Sensex – 35062 and Nifty 10652) as well as medium term average of 50dma (Sensex – 34660 and Nifty – 10576), but managed to close well above these levels. Both Sensex and Nifty continue to stay well above the long term average of 200dma (Sensex – 33636 and Nifty – 10374). Thus the trend in short term, medium term as well as in the long term timeframe continues to remain Upwards.

 

MACD and Price ROC are both positive and in Buy mode. RSI (58) suggests bullish momentum. Stochastic Oscillator %K (83) is above %D and hence in Buy mode. ADX has fallen to 14, suggesting a sideways consolidation and no strength in trend. Directional Indicators are in Buy mode as +DI is above –DI. MFI (53) suggests Positive Money Flow. OBV continues in sideways mode. Thus Oscillators suggest a bullish bias for the near term.

 

Options data for June series indicate highest Call Open Interest is at the strike of 11000 whereas the highest Put build-up is at the strike of 10600. Thus Options data suggests a trading range with resistance at 11000 & support at 10600.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

10441

10558

10666

10767

10878

10994

11110

Sensex

34302

34666

35006

35443

35827

36256

36662

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy BajajFinance

2186

2141

2255

2326

Buy MindTree

1028

1008

1059

1093

Buy Lupin

810

792

838

867

Buy MGL

847

830

873

900

Buy CanaraBank

276

270

286

297

 

WATCH OUT FOR:

 

MidCap 50
 
Lupin
 
 
 
 
 
 

 

 

 

 

 

 


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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