Archives : STATUS-QUO MAINTAINED - 11/01/2019

STATUS QUO MAINTAINED - 11/01/2019.

 

TRADING RANGE GETS NARROWER.

 

The drama seemed to be missing as more than three trading days of the past week, resulted in Doji formation or some other neutral formation. The trading was lack-lustre as the Market seemed happy to stay put in a Trading Range whose boundaries are defined by the Medium Term Moving Averages viz. 50dma (10710) as Support and 100dma (10855) as Resistance, which has been the case for past five weeks now. As soon as the Nifty moves towards the upper boundary, supply sets in and demand creeps in near the lower end of the Trading Range. Now the Trading Range is getting narrower day by day and a possible breakout seems imminent in the near term. A break on the upside will help Nifty move higher to test the Reversal Level of 11089 & a Bearish break will throw the Nifty down towards a level of 10333-10004.

 

                                                                                          


STATUS QUO MAINTAINED - 11/01/2019.

 

TRADING RANGE GETS NARROWER.

 

The drama seemed to be missing as more than three trading days of the past week, resulted in Doji formation or some other neutral formation. The trading was lack-lustre as the Market seemed happy to stay put in a Trading Range whose boundaries are defined by the Medium Term Moving Averages viz. 50dma (10710) as Support and 100dma (10855) as Resistance, which has been the case for past five weeks now. As soon as the Nifty moves towards the upper boundary, supply sets in and demand creeps in near the lower end of the Trading Range. Now the Trading Range is getting narrower day by day and a possible breakout seems imminent in the near term. A break on the upside will help Nifty move higher to test the Reversal Level of 11089 & a Bearish break will throw the Nifty down towards a level of 10333-10004.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 35971, made a high of 36269, low of 35753 and closed the week at 36009. Thus it closed the week with a gain of 314 points. At the same time the Nifty opened the week at 10804, made a high of 10870, low of 10733 and closed the week at 10794. Thus the Nifty closed the week with a gain of 67 points.

 

On the daily charts, both the indices have formed a small black body candle with a longer lower shadow indicating buying at lower levels. On the weekly front, both Sensex and Nifty have formed a Doji which is a neutral formation. But it cannot be given significance due to the fact that the formation has occurred in sideways consolidation. Thus daily as well as weekly candlestick formation is suggesting a minor 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, again both the indices tested and closed just below not only the long term average of 200dma (Sensex – 35711 and Nifty – 10802) but also the short term average of 20dma (Sensex – 35994 and Nifty – 10815). Both the indices took support before rebounding at the medium term average of 50dma (Sensex – 35627 and Nifty – 10710). Thus the Trend in long term and short term is down, whereas the trend in the medium term is still Bullish.

 

MACD is in Sell mode, whereas Price ROC continues Buy mode. RSI (52) suggests Bullish momentum. Stochastic Oscillator %K (69) is above %D and hence in Buy mode. ADX (15) suggests a sideways consolidation with no clear 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 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

10489

10588

10695

10794

10923

11035

11145

Sensex

35010

35382

35707

36009

36446

36747

37128

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Merck

3299

3228

3407

3523

TorrentPharma

1885

1847

1943

2005

Buy PVR

1644

1606

1702

1763

Buy Star

480

472

493

507

Buy MuthootFin

537

526

554

573


WATCH OUT FOR:

 

Tornt Pharma
 
Merck
 
 

 

 

 

 

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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