Archives : VOLATILE WEEK ENDS ON POSITIVE NOTE - 28/12/2018

VOLATILE WEEK ENDS ON A POSITIVE NOTE - 28/12/2018.

 

TREND TURNS BULLISH AGAIN.

 

Even though the week gone by was a truncated week, there was enough drama to make both Bulls and Bears nervous. The week started by breaking the strong support of 200dma and the slide took the market further down to test the support provided by 50dma. Wednesday saw a Bullish Piercing Line formation which reversed the short term trend. By the end of week, the indices had recovered enough ground to close above the 200dma as well as 20dma. Currently, the indices are near the top end of the trading range which is underlined by the 100dma. Last two times, the indices made intermittent tops when challenging the 100dma but could not surpass that. If the 100dma is taken out this time, then the Nifty is likely to test the Reversal level of 11089.

 


VOLATILE WEEK ENDS ON A POSITIVE NOTE - 28/12/2018.

 

TREND TURNS BULLISH AGAIN.

 

Even though the week gone by was a truncated week, there was enough drama to make both Bulls and Bears nervous. The week started by breaking the strong support of 200dma and the slide took the market further down to test the support provided by 50dma. Wednesday saw a Bullish Piercing Line formation which reversed the short term trend. By the end of week, the indices had recovered enough ground to close above the 200dma as well as 20dma. Currently, the indices are near the top end of the trading range which is underlined by the 100dma. Last two times, the indices made intermittent tops when challenging the 100dma but could not surpass that. If the 100dma is taken out this time, then the Nifty is likely to test the Reversal level of 11089.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 35859, made a high of 36194, low of 35010 and closed the week at 36076. Thus it closed the week with a gain of 334 points. At the same time the Nifty opened the week at 10780, made a high of 10893, low of 10534 and closed the week at 10859. Thus the Nifty closed the week with a gain of 105 points.

 

On the daily charts, both the indices have formed a small Opening White body Marubuzo with a small upper shadow. It has little relevance as the body is small. On the weekly chart, both Sensex and Nifty have formed a Hammer like formation which if taken along with previous week, it forms a Bullish Harami. But since the formation is occurring in consolidation, it will not have any significance. Thus daily as well as weekly candlestick patterns are suggesting a Bullish bias.

 

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 Retracement 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 and closed above not only the long term average of 200dma (Sensex – 35584 and Nifty – 10775) as well as the short term average of 20dma (Sensex – 35877 and Nifty – 10779). Both the indices took support before rebounding at the medium term average of 50dma (Sensex – 35261 and Nifty – 10601). Thus the trend in long term and short term has recovered to Upwards, whereas the trend in the medium term is still Bullish.

 

MACD is in Sell mode whereas Price ROC is positive and in Buy mode. RSI (55) suggests Bullish momentum. Stochastic Oscillator %K (70) is above %D and hence in Buy mode. ADX (13) suggests a sideways trend. Directional Indicators are in a Sell mode as +DI is below –DI. MFI (50) suggests Positive Money Flow. OBV continues to make higher top higher bottom. Thus majority of Oscillators are suggesting a bullish bias.

 

Options data for January series indicate highest Call Open Interest is at the strike of 11200 whereas the highest Put build-up is at the strike of 10500. Thus Options data suggests a wide trading range with resistance at 11200 & support at 10500.


INDEX LEVELS:


 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

10534

10635

10747

10859

10941

11035

11145

Sensex

34896

35266

35711

36076

36446

36747

37128


THIS WEEKS RECOMMENDATIONS:


STOCK

CMP

SL

Tgt-1

Tgt-2

Buy PEL

2358

2307

2435

2513

Buy Siemens

1043

1022

1075

1109

Buy Glenmark

696

680

720

745

Buy BoB

118

115

123

129

Buy Sanofi

6339

6200

6562

6797


WATCH OUT FOR:

 

Glenmark Pharma
 

 

 

 

 

 

 

   

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.

Copyright © 2000 - 2019 Jatin Sanghavi. All rights reserved.
No part of the material on this website may be reproduced or distributed in any forms or by any means, electronics or mechanical without the written permission of the author.
Sitemap