Archives : NIFTY HEADED ABOVE 11000 - 18/01/2019.

 

Due to unavoidable circumstances, there is no Article update on 25/01/2019.

 

Please note that the next Update will be on 01/02/2019. 

 

 

 


NIFTY HEADED ABOVE 11000 - 18/01/2019.

 

NIFTY CLOSES ABOVE 100 DMA FINALLY.

 

Even as the Nifty continues to stay in its Trading Range of 10534-10985, interestingly Nifty has managed a close above the 100dma which was acting as a Resistance for past six weeks. As a result, Nifty now seems headed higher towards 11089 which is the Reversal Level and probably towards a short term pattern target of 11416. Interestingly on the lower side, the Moving Averages viz 200dma, 100dma, 50dma and 20dma have converged into a narrow band between Sensex 35981-35775 and Nifty 10825-10749. Any downward movement on the indices will see this Confluence Band acting as strong Support.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 36113, made a high of 36469, low of 35691 and closed the week at 36386. Thus it closed the week with a gain of 377 points. At the same time the Nifty opened the week at 10807, made a high of 10930, low of 10692 and closed the week at 10906. Thus the Nifty closed the week with a gain of 112 points.

 

On the daily charts, both the indices have formed a small black body Spinning Top for third consecutive day after the breakout above 100dma. The lower shadow indicates buying support at lower levels. On the weekly chart, both Sensex and Nifty have formed a Real White Body candle with a longer lower shadow indicating buying at lower levels. Thus daily as well as weekly candlestick formations are suggesting a bullish bias.

 

This is the 6th week that both the indices are still 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.

 

Interestingly all the significant Moving Averages (20dma, 50dma, 100dma & 200dma) have converged into a narrow Confluence Zone between Sensex 35981-35775 and Nifty 10825-10749. This Zone will act as Strong Support Zone going forward.

 

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 but closed above not only the long term average of 200dma (Sensex – 35793 and Nifty – 10821) but also the short term average of 20dma (Sensex – 35981 and Nifty – 10806). Both the indices took support before rebounding at the medium term average of 50dma (Sensex – 35775 and Nifty – 10749). Thus the Trend in long term and short term has turned Up, whereas the trend in the medium term is still Bullish.

 

MACD and Price ROC continues in Buy mode. RSI (56) suggests Bullish momentum. Stochastic Oscillator %K (90) is above %D and hence in Buy mode. ADX (13) 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

10606

10710

10815

10906

10999

11078

11185

Sensex

35266

35605

35993

36386

36747

37128

37559

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy HDFC

2006

1972

2057

2111

Godfrey Philips

951

930

983

1017

Buy L&T Info

1807

1766

1869

1943

Buy Wipro

346

338

359

373

Buy Adani Port

399

390

413

428

 

WATCH OUT FOR:

 

Wipro

 

 

 

 

 

 

 

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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