Archives : PAUSE IN THE UPWARD RALLY - 10/08/2018.

PAUSE IN THE UPWARD RALLY - 10/08/2018.

 

UPTREND INTACT.

 

Last week, both the indices continued its upward rally and in the process overcame the Measuring Gap target of 37934 for the Sensex and 11469 for the Nifty. On Friday, both the Indices seem to have hit a speed-breaker around Sensex 38000 and 11500 for the Nifty. This was on expected lines, as the Nifty has seen a rise of almost 570 points in a matter of just four weeks. As a result of this stupendous rise, many oscillators had turned over-bought and thus a pause or minor Pull-back will not be out of place. The Uptrend remains intact and thus buying will be witnessed on declines.

 


PAUSE IN THE UPWARD RALLY - 10/08/2018.

 

UPTREND INTACT.

 

Last week, both the indices continued its upward rally and in the process overcame the Measuring Gap target of 37934 for the Sensex and 11469 for the Nifty. On Friday, both the Indices seem to have hit a speed-breaker around Sensex 38000 and 11500 for the Nifty. This was on expected lines, as the Nifty has seen a rise of almost 570 points in a matter of just four weeks. As a result of this stupendous rise, many oscillators had turned over-bought and thus a pause or minor Pull-back will not be out of place. The Uptrend remains intact and thus buying will be witnessed on declines.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 37714, made a high of 38076, low of 37586 and closed the week at 37869. Thus it closed the week with a gain of 313 points. At the same time the Nifty opened the week at 11401, made a high of 11495, low of 11359 and closed the week at 11429. Thus the Nifty closed the week with a gain of 69 points.

 

On the daily charts, both Sensex and Nifty has formed a Real Black body candle. Sensex has formed an Opening Black body Marubuzo which completely engulfs previous days white candle-body. On the weekly charts, both the indices have formed a small white body Spinning Top candle in line with the upward trend. Thus daily charts suggest a Bearish bias, whereas weekly patterns are still Bullish.

 

This week, both the indices opened with a gap-up and created a Bullish Gap between 37643-37582 for the Sensex and 11370-11368 for the Nifty. This Gap will act as a Support. Also, both the indices have left behind another Bullish Gap between Sensex 37131-37061 and Nifty 11210-11185, which happened two weeks back. Both these Gaps will act as strong Support.

 

Both Sensex and Nifty have completed a Rounding Bottom formation and the Target as per that pattern falls at Sensex 40403 and Nifty 12391. Also both the indices had completed a Bullish Cup and Handle pattern which has a target of Sensex 39503 and Nifty 11907. The handle itself has a Symmetrical Triangle within it and which has a target of Sensex 37345 and Nifty 11336, whose target has been achieved. The above targets will be achieved as long as Sensex remains above 34937 and Nifty above 10557.

 

This week, both the indices were above the short term average of 20dma (Sensex – 37163 and Nifty – 11222) as well as medium term average of 50dma (Sensex – 36212 and Nifty – 10955). Also both the indices continue to remain above the long term average of 200dma (Sensex – 34624 and Nifty – 10597). Thus the trend in short term, medium term as well as long term time-frame remains Bullish.

 

MACD and Price ROC are both positive and continue in Buy mode. RSI (69) suggests strong bullish momentum. Stochastic Oscillator %K (92) is below %D and hence in Sell mode. ADX has increased to 41, suggests a very strong Uptrend. Directional Indicators continue in Buy mode as +DI is above –DI. MFI (79) suggests Positive Money Flow. OBV is making higher top higher bottom formation. Thus Oscillators suggest a bullish bias. Interestingly certain Momentum Oscillators are getting into overbought terrain, which suggests a minor consolidation can creep in any time.

 

Options data for August series indicate highest Call Open Interest is at the strike of 11500 whereas the highest Put build-up is at the strike of 11000. Thus Options data suggests a trading range with resistance at 11500 & support at 11000.


INDEX LEVELS:


 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

11117

11234

11338

11429

11503

11599

11682

Sensex

36747

37128

37586

37869

38162

38543

38889


THIS WEEKS RECOMMENDATIONS:

                                                                                                                    

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy BOSCH

19370

19030

19889

20423

Buy BajajFinserv

7083

6933

7311

7539

BergerPaints

328

321

339

351

Buy GraphiteInd

1106

1084

1141

1177

Buy InfiBeam

195

191

201

208

 

WATCH OUT FOR:

 

Bosch
 
Graphite
 
 
 
 
 

 

 

 

 

 

 


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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