Archives : SUPPORT TAKEN @ 10550 - 29/06/2018

SUPPORT TAKEN @ 10550 - 29/06/2018.

 

IT IS NOT OVER YET.

 

The Trading Range for the Nifty had shrunk to just 200 points and a breakout was expected. The greater probability pointed towards a bearish breakout and it happened.  As discussed in the previous article, Nifty fell sharply and tested the lower support level of 10550. The drama was yet to unfold as the Bulls made a comeback and reversed major losses and the Nifty was back above 10700. The tussle between the Bulls and Bears continues but in the bargain, the Short Term Trend of the market has turned negative. Any further fall or break below the 10550 support level will test the higher bottom at 10417 which coincides with the 200dma.

 

 


SUPPORT TAKEN @ 10550 - 29/06/2018.

 

IT IS NOT OVER YET.

 

The Trading Range for the Nifty had shrunk to just 200 points and a breakout was expected. The greater probability pointed towards a bearish breakout and it happened.  As discussed in the previous article, Nifty fell sharply and tested the lower support level of 10550. The drama was yet to unfold as the Bulls made a comeback and reversed major losses and the Nifty was back above 10700. The tussle between the Bulls and Bears continues but in the bargain, the Short Term Trend of the market has turned negative. Any further fall or break below the 10550 support level will test the higher bottom at 10417 which coincides with the 200dma.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 35783, made a high of 35806, low of 34937 and closed the week at 35423. Thus it closed the week with a loss of 266 points. At the same time the Nifty opened the week at 10822, made a high of 10831, low of 10557 and closed the week at 10714. Thus the Nifty closed the week with a loss of 107 points.

 

On the daily charts, both Sensex and Nifty has formed a big white body candle on Friday. Combined formation for the last three days forms Downside Gap Three Methods which is a bearish continuation pattern. On the weekly charts, both Sensex and Nifty have formed a black body candle with longer lower shadow. Lower shadow indicates pull-back from lower levels. This cannot be called a Hanging Man as it has formed in sideway consolidation. Thus daily as well as weekly charts are hinting at a bearish bias in the near term.

 

This week, both the indices finally breached the strong support of Bullish Gap between Sensex 35278-35230 and Nifty 10722-10698 which coincided with 20dma. As expected the Nifty tested the support of 10550 and bounced back from there. This support level of 10550 holds great significance and a breach of this level will test the higher bottom at 10417.

 

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 (4850) has given a Bearish Head & Shoulders breakout and is now headed towards 4600 followed by 4338. Only a closing above 5100 will negate the bearish breakout.

 

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 – 35414 and Nifty – 10745) as well as medium term average of 50dma (Sensex – 35161 and Nifty – 10692). Somehow the indices managed to close above the medium term average of 50dma but failed to close above the short term average of 20dma. However, both the indices still remain above the long term average of 200dma (Sensex – 33925 and Nifty – 10439). Thus the trend in short term has turned Bearish whereas the trend in the medium term as well as in the long term timeframe continues to remain Upwards.

 

MACD as well as Price ROC is in Sell mode. RSI (50) suggests bullish bias. Stochastic Oscillator %K (22) is below %D and hence in Sell mode. ADX has fallen to 13, suggesting a sideways consolidation and no strength in trend. Directional Indicators are in Sell mode as +DI is below –DI. MFI (41) suggests Negative Money Flow. OBV is making lower top lower bottom formation. Thus Oscillators suggest a bearish bias.

 

Options data for July 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

10417

10514

10628

10714

10818

10929

11009

Sensex

34302

34666

35006

35423

35806

36256

36662


THIS WEEKS RECOMMENDATIONS:


STOCK

CMP

SL

Tgt-1

Tgt-2

Sell ShriramTrans

1299

1326

1258

1216

Sell BharatFinanace

1156

1177

1124

1090

Sell BalkrishnaInd

1042

1063

1010

977

Sell Indigo

1088

1110

1055

1021

Sell ICICIBank

275

281

266

256


WATCH OUT FOR:

 

Bharat Fin
 
 

 

 

 


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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