Archives : GLOBAL JITTERS HALT THE RALLY - 21/12/2018

GLOBAL JITTERS HALT THE RALLY - 21/12/2018.

 

SHORT TERM TREND REVERSES.

 

The out-performance of the Indian market in the past seven days was extra-ordinary as we were the best performing markets across the globe. The divergence between the US market and our market kept on increasing and it reached a point where finally our market had to follow the downward direction. After gaining a stupendous 650 points in just over seven days, the market finally corrected. A Correction is a healthy part of any Bull rally. But the fall on Friday can be classified as a Correction of the ongoing Retracement. The relevant Correction levels are placed at Nifty 10610-10494-10379.

 


GLOBAL JITTERS HALT THE RALLY - 21/12/2018.

 

SHORT TERM TREND REVERSES.

 

The out-performance of the Indian market in the past seven days was extra-ordinary as we were the best performing markets across the globe. The divergence between the US market and our market kept on increasing and it reached a point where finally our market had to follow the downward direction. After gaining a stupendous 650 points in just over seven days, the market finally corrected. A Correction is a healthy part of any Bull rally. But the fall on Friday can be classified as a Correction of the ongoing Retracement. The relevant Correction levels are placed at Nifty 10610-10494-10379.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 36129, made a high of 36054, low of 35694 and closed the week at 35742. Thus it closed the week with a loss of 220 points. At the same time the Nifty opened the week at 10853, made a high of 10985, low of 10738 and closed the week at 10754. Thus the Nifty closed the week with a loss of 51 points.

 

On the daily charts, Sensex has formed a big Black body candle which is engulfing the bullishness of past six days. On the weekly chart, both the indices have formed a small black body candle with a longer upper shadow which indicates selling at higher levels. Thus daily candlestick pattern as well as weekly candlestick pattern is suggesting a Bearish bias.

 

The upward Rally managed a close above the top of Bearish Island Reversal (Sensex – 36446 and Nifty 10941), thereby negating the bearish effect of the Island Reversal.

 

Nifty is trading within well defined boundaries; the upper boundary is the current top i.e. 10985 and on the lower side 10333. In the near term, the indices are likely to stay within these boundaries. A break of the lower boundary will result in testing of 10000 levels and a break on the upside will take the Nifty higher to test the Trend Reversal level of 11089.

 

The Correction of the current upward Retracment is at Sensex 35300-34922-35538 and Nifty 10610-10494-10379. A break below Nifty 10379, will see the intermediate Correction resuming and the intermediate Correction levels are placed at Sensex 33920-32354-30788 and Nifty 10283-9827-9371. Higher degree Correction levels are placed at Sensex 32688-30742-28796 and Nifty 9875-9293-8710. Thus we have two confluence zones which will act as Support Zones. First Confluence Support Zone is between Sensex 32688-32354 and Nifty 9875-9827. Second Confluence Support Zone falls between Sensex 30788-30724 and Nifty 9371-9293.

 

This week, both the indices tested the long term average of 200dma (Sensex – 35540 and Nifty – 10766) but only Sensex could close above it. Both the indices have closed below the short term average of 20dma (Sensex – 35862 and Nifty – 10772). Both the indices continue to remain above the medium term average of 50dma (Sensex – 35167 and Nifty – 10574). Thus the trend in long term and short term has turned Down, whereas the trend in the medium term is still Bullish.

 

MACD is in Buy mode whereas Price ROC is negative and in Sell mode. RSI (50) still suggests Bullish momentum. Stochastic Oscillator %K (85) is below %D and hence in Sell mode. ADX (12) suggests that a sideways trend. Directional Indicators are in a Sell mode as +DI is below –DI. MFI (41) still suggests Negative Money Flow. OBV continues to make higher top higher bottom. Thus majority of Oscillators are suggesting a bearish bias.

 

Options data for December series indicate highest Call Open Interest is at the strike of 11000 whereas the highest Put build-up is at the strike of 10000. Thus Options data suggests a wide trading range with resistance at 11000 & support at 10000.


INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

10440

10558

10645

10754

10844

10941

11035

Sensex

34563

34915

35378

35742

36123

36446

36747


THIS WEEKS RECOMMENDATIONS:


STOCK

CMP

SL

Tgt-1

Tgt-2

Buy HeroMoto

3324

3255

3429

3536

Buy CoLPaL

1327

1302

1365

1405

Buy GruhFinance

330

322

342

355

Buy HPCL

250

244

259

269

Buy CGPower

43

41

47

51


WATCH OUT FOR:

 

CGPower
 

 

 

 

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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