Archives : PROFIT BOOKING SETS IN @ 11600 - 24/08/2018

PROFIT BOOKING SETS IN @ 11600 - 24/08/2018.

 

RALLY CONTINUES, MOMENTUM REDUCES.

 

After witnessing a stupendous rally in the last eight weeks, where the Sensex increased by a whopping 3500 points and Nifty almost 1050 points, some sluggishness has set in. The current Rally is almost like a vertical rise and a period of Consolidation or Correction will not be out of place for the market. In fact, any Correction is welcome as it will set the base for the next upward move. Strong Support will be seen at Nifty 11499-11486 which is a Bullish Gap on both daily as well as weekly timeframe. Last two times when the Nifty tried to correct, both the times there were Bullish Gaps which provided Support and as a result the Correction was very short lived.

 


PROFIT BOOKING SETS IN @ 11600 - 24/08/2018.

 

RALLY CONTINUES, MOMENTUM REDUCES.

 

After witnessing a stupendous rally in the last eight weeks, where the Sensex increased by a whopping 3500 points and Nifty almost 1050 points, some sluggishness has set in. The current Rally is almost like a vertical rise and a period of Consolidation or Correction will not be out of place for the market. In fact, any Correction is welcome as it will set the base for the next upward move. Strong Support will be seen at Nifty 11499-11486 which is a Bullish Gap on both daily as well as weekly timeframe. Last two times when the Nifty tried to correct, both the times there were Bullish Gaps which provided Support and as a result the Correction was very short lived.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 38075, made a high of 38487, low of 38050 and closed the week at 38251. Thus it closed the week with a gain of 304 points. At the same time the Nifty opened the week at 11502, made a high of 11620, low of 11499 and closed the week at 11557. Thus the Nifty closed the week with a gain of 87 points.

 

On the daily charts, Nifty has formed a Doji, whereas Sensex has formed a small black body candle which is a neutral formation. But the last three days, have seen formations which are neutral and are almost like a Tri-Star. A bearish candle on Monday will confirm the pattern, whereas a close above the top i.e. Sensex 38487 and Nifty 11620 will negate the pattern. On the weekly front, both Sensex and Nifty have formed a small white body candle with an upper shadow. Daily candlestick formation suggests a Bearish bias whereas the weekly bias still remains positive.

 

Last week saw a creation of another Bullish Gap between Sensex 38050-38022 and Nifty 11499-11486. This Gap will provide strong Support to the indices as this Gap has been formed on both daily as well as weekly timeframes.

 

The above mentioned Bullish Gap (Sensex 38050-38022 and Nifty 11499-11486) is the third Bullish Gap in the current Rally. The current Rally has seen two more Bullish Gaps which have provided support to the market and in the process the indices have formed a higher bottom before bouncing back. A break of the above mentioned Bullish Gap will lead the market down to test the Support of second Bullish Gap between Sensex 37643-37582 and Nifty 11370-11368. The first Bullish Gap is at Sensex 37131-37061 and Nifty 11210-11185, which is an extremely strong Support for the market.

 

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 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 – 37753 and Nifty – 11405) as well as medium term average of 50dma (Sensex – 36638 and Nifty – 11075). Also both the indices continue to remain above the long term average of 200dma (Sensex – 34809 and Nifty – 10641). Thus the trend in short term, medium term as well as long term time-frame remains Bullish.

 

MACD as well as Price ROC are both positive and in Buy mode. RSI (68) suggests strong bullish momentum. Stochastic Oscillator %K (89) is below %D and hence in Sell mode. ADX has increased to 40, suggests a very strong Uptrend. Directional Indicators continue in Buy mode as +DI is above –DI. MFI (64) suggests Positive Money Flow. OBV is making higher top higher bottom formation. Buy Signal continues in Bollinger Band as well. Thus Oscillators suggest a bullish bias.

 

Options data for August series indicate highest Call Open Interest is at the strike of 11600 whereas the highest Put build-up is at the strike of 11000. Thus Options data suggests a trading range with resistance at 11600 & support at 11000.

 

INDEX LEVELS:


 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

11234

11340

11452

11557

11650

11731

11838

Sensex

37128

37559

37932

38251

38593

38889

39262


THIS WEEKS RECOMMENDATIONS:


STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Pidilite

1151

1130

1182

1215

Buy Glenmark

661

648

681

702

Buy TechMah

718

703

741

765

Buy RBLBank

609

596

629

651

Buy Grasim

1060

1040

1091

1123


WATCH OUT FOR:

 

Glenmark Cup & Handle
 
Wipro

 

 

 

 

 

 

 

 

 

 

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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