Archives : BETWEEN 50DMA & 100DMA - 04/01/2018

BETWEEN 50DMA & 100DMA - 04/01/2019.

 

VOLATILE BUT IN A TRADING RANGE.

 

For the week gone by, the market’s behaviour can aptly be described as ‘Volatile but in a trading range’. For the past four weeks, the Nifty is oscillating in a Trading Range whose boundaries are governed precisely by the Medium Term Moving Averages viz. 50dma (10646) as Support and 100dma (10866) as Resistance. As soon as the Nifty moves towards upper boundary, supply sets in and demand creeps in near the lower end of the Trading Range. A break on the upside will help Nifty move higher to test the Reversal Level of 11089 and a Bearish break on the lower side, will throw the Nifty down towards level of 10333-10004.

 


BETWEEN 50DMA & 100DMA - 04/01/2019.

 

VOLATILE BUT IN A TRADING RANGE.

 

For the week gone by, the market’s behaviour can aptly be described as ‘Volatile but in a trading range’. For the past four weeks, the Nifty is oscillating in a Trading Range whose boundaries are governed precisely by the Medium Term Moving Averages viz. 50dma (10646) as Support and 100dma (10866) as Resistance. As soon as the Nifty moves towards upper boundary, supply sets in and demand creeps in near the lower end of the Trading Range. A break on the upside will help Nifty move higher to test the Reversal Level of 11089 and a Bearish break on the lower side, will throw the Nifty down towards level of 10333-10004.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 36239, made a high of 36285, low of 35382 and closed the week at 35695. Thus it closed the week with a loss of 381 points. At the same time the Nifty opened the week at 10913, made a high of 10923, low of 10628 and closed the week at 10727. Thus the Nifty closed the week with a loss of 132 points.

 

On the daily charts, both the indices have formed a small Bullish Harami, which is a Bullish Reversal pattern which requires confirmation. But if we check only Fridays candle, then we have small white body candle with a long lower shadow which is indicative of Buying at lower levels. On the weekly front, both Sensex and Nifty have formed a Bearish Engulfing which is a Bearish Reversal pattern. But it cannot be given significance due to the fact that the formation has occurred in sideways consolidation. Thus daily, more than weekly candlestick pattern is suggesting a Bullish bias.

 

Both the indices are trading within well defined boundaries; the short term Trading Range for the Sensex is 36554-35010 and Nifty 10985-10534. A break of the lower boundary will lead the Sensex to test higher bottoms of 34426-33291 and Nifty 10333-10004. Similarly a break of the upper boundary, will lead the Sensex to test the Reversal level of 36813 and 11089 for the Nifty.

 

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 below not only the long term average of 200dma (Sensex – 35640 and Nifty – 10787) but also the short term average of 20dma (Sensex – 35860 and Nifty – 10776). Both the indices took support before rebounding at the medium term average of 50dma (Sensex – 35404 and Nifty – 10646). Thus the Trend in long term and short term is down, whereas the trend in the medium term is still Bullish.

 

MACD as well as Price ROC are in Sell mode. RSI (48) suggests Bearish momentum. Stochastic Oscillator %K (43) is below %D and hence in Sell mode. ADX (15) suggests a sideways consolidation with no clear trend. Directional Indicators are in a Sell mode as +DI is below –DI. MFI (48) suggests Negative Money Flow. OBV continues to make higher top higher bottom. Thus majority of Oscillators are suggesting a Bearish bias.

 

Options data for January series indicate highest Call Open Interest is at the strike of 11000 whereas the highest Put build-up is at the strike of 10500. Thus Options data suggests a wide trading range with resistance at 11000 & support at 10500.


INDEX LEVELS:


 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

10440

10534

10628

10727

10838

10935

11035

Sensex

34672

35010

35382

35695

36046

36446

36747


THIS WEEKS RECOMMENDATIONS:


STOCK

CMP

SL

Tgt-1

Tgt-2

Buy BPCL

359

352

370

382

Buy CanBank

282

276

291

301

Buy DCB

173

169

179

186

Buy DishTV

39

37

43

47

Buy IDFCBank

45

43

49

53


WATCH OUT FOR:

 

IDFC Bank
 
DishTV

 

 

 

 

 

 

 

 

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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