Archives : FEAR GRIPS MARKET - 28/09/2018

FEAR GRIPS MARKET - 28/09/2018.

 

PANIC BOTTOM RETESTED TWICE.

 

The week started on an optimistic note as the Nifty registered a Bullish Harami, but there was no confirmation for that and what followed was a proper thrashing of the Bulls for the rest of the week. The Indices have again taken support at the same Gap (Sensex 36019-35977 and Nifty 10876-10860) on Friday. As suggested in the previous week’s article, Panic Bottom created last Friday was retested twice this week. But one cannot say with certainty whether the above Gap-Support will hold or not, as the Bears are showing no signs of relenting. In the current backdrop where majority of the NBFCs are crashing, the mood of the market has turned extremely bearish and even the slightest of the Pull-Backs are being sold into. In such a scenario, one can expect Nifty to find Support at the strong Support zone of 10770-10643.

 

 


FEAR GRIPS MARKET - 28/09/2018.

 

PANIC BOTTOM RETESTED TWICE.

 

The week started on an optimistic note as the Nifty registered a Bullish Harami, but there was no confirmation for that and what followed was a proper thrashing of the Bulls for the rest of the week. The Indices have again taken support at the same Gap (Sensex 36019-35977 and Nifty 10876-10860) on Friday. As suggested in the previous week’s article, Panic Bottom created last Friday was retested twice this week. But one cannot say with certainty whether the above Gap-Support will hold or not, as the Bears are showing no signs of relenting. In the current backdrop where majority of the NBFCs are crashing, the mood of the market has turned extremely bearish and even the slightest of the Pull-Backs are being sold into. In such a scenario, one can expect Nifty to find Support at the strong Support zone of 10770-10643.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 36924, made a high of 36945, low of 35985 and closed the week at 36227. Thus it closed the week with a loss of 614 points. At the same time the Nifty opened the week at 11164, made a high of 11170, low of 10850 and closed the week at 10930. Thus the Nifty closed the week with a loss of 213 points.

 

On the daily charts, both Sensex and Nifty have formed Real Black body candles on last three days of the week as in Three Black Crows. On the weekly charts, both the indices have formed a big Opening Black Body Marubuzo in line with the downward Trend. Thus daily as well as weekly candlestick formations are suggesting a Bearish Bias.

 

Higher degree Correction levels are placed at Sensex 36504-35736-34969 and Nifty 11069-10856-10643. The Bears were relentless this week as last three each day saw Bears hammering down the index, with Tuesday and Friday successfully retesting and taking support at the 50% Correction level.

 

Gap Support (i.e. between Sensex 36019-35977 and Nifty 10876-10860) came to the rescue for the second week running. This Gap is the Breakaway Gap which continues to act as a strong Support for the market. Market retested last Friday’s bottom twice this week i.e. Sensex made a low at 35985 and Nifty at 10850, which was exactly in the Gap Support mentioned above.

 

Both Sensex and Nifty are in Correction mode and any closing above the confluence zone of Sensex 38360-38421 and Nifty 11565-11603 will signal the end of Correction.

 

Both Sensex and Nifty had 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 are well below both the short term average of 20dma (Sensex – 37524 and Nifty – 11335) as well as medium term average of 50dma (Sensex – 37560 and Nifty 11344). Both the indices are still above the long term average of 200dma (Sensex – 35322 and Nifty – 10770). Thus the trend in short term as well as medium term timeframe is bearish, whereas the trend in the long term time-frame still remains Up.

 

MACD and Price ROC are in Sell mode. RSI (32) suggests Bearish momentum. Stochastic Oscillator %K (17) is below %D and hence in Sell mode. ADX is now at 35, suggesting that the Down Trend is very strong. Directional Indicators are in Sell mode as +DI is below –DI. MFI (18) suggests Negative Money Flow. OBV is making lower top lower bottom formation. Bollinger Band continues with its Sell signal. Thus Oscillators are suggesting a bearish bias.

 

Options data for October series indicate highest Call Open Interest is at the strike of 11500 whereas the highest Put build-up is at the strike of 10800. Thus Options data suggests a trading range with resistance at 11500 & support at 10800.


THIS WEEKS RECOMMENDATIONS:


STOCK

CMP

SL

Tgt-1

Tgt-2

Sell CESC

821

838

795

768

Sell KSCL

580

592

562

543

Sell JustDiaL

478

488

463

447

Sell JsWSteeL

382

390

370

357

Sell DCB

148

151

143

138


INDEX LEVELS:


 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

10647

10736

10837

10930

11034

11145

11234

Sensex

35230

35555

35877

36227

36693

37061

37559


WATCH OUT FOR:

 

Nifty Support Zone
 

 

 

 

 


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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