Archives : SEASON OF WHIPSAWS - 17/07/2009

 SEASON OF WHIPSAWS 17/07/2009.  

The market witnessed a stunning rebound from the lows. On Monday the Sensex was well on its way to fill the gap between 13479-12256, but somehow the market suddenly reversed its direction and started moving up. By Tuesday, the Sensex had completed a Bullish Reversal pattern known as Morning Doji Star and Nifty too completed a Bullish Morning Star Reversal Pattern. Thus an intermittent bottom was formed at Sensex – 13216 and Nifty – 3918.

 


It was a week where majority of the stop losses might have triggered as we witnessed a terrific bear trap and the market reversed its direction. The whipsaws continue for the second straight week, making it increasingly difficult for the traders. Last week, when both the indices breached the 50dma and went down, an intermittent downtrend was confirmed. But both the indices took support at just above the 200 week MA and bounced back and in the process managed a close above the 50dma in the past week. Once again, the intermittent trend which was down, turned up.

SENSEX.

Sensex opened the week at 13405, made a high of 14800, made a low of 13219, and closed at 14744, thus registering a weekly gain of 1240 points. 

The Sensex formed a Bullish Reversal pattern by Tuesday known as Morning Doji Star on the daily charts. The Sensex has formed a Bullish Opening White Marubuzo on Friday on the daily charts. On the weekly chart, a Bullish Reversal pattern called Piercing Line has been confirmed. 

The Sensex fell after giving a buy signal two weeks before. In the previous week the Sensex gave a sell signal and reversed its direction from down to up. Thus it will be interesting to see what happens in this week, whether the Sensex obeys the buy signal and move up or once again give another whipsaw for the week ahead. 

The Sensex has managed a close above the 50dma (14198) and hence the short to medium term trend has turned up. 

The MACD even though has not yet given a buy signal, is just about to give a buy signal, while ROC & RSI have given a buy signal. 

The Trendline support for Sensex is at 14497. 

For the week ahead the Resistance is at 14930-15257-15600. Support is at 14497-14241-14016.  

NIFTY. 

Nifty opened the week at 4003, made a high of 4390, low of 3918, and closed at 4374. Thus the weekly gain was 371 points. 

The Nifty formed a Bullish Reversal pattern by Tuesday known as Morning Star on the daily charts. The Nifty has formed a White Marubuzo on Friday on the daily charts. On the weekly chart, Nifty has formed Bullish Harami. 

The Nifty fell after giving a buy signal two weeks before. In the previous week the Nifty gave a sell signal and reversed its direction from down to up. Thus it will be interesting to see what happens in this week, whether the Nifty obeys the buy signal and move up or once again give another whipsaw for the week ahead. 

The Nifty has managed a close above the 50dma (4261) and hence the short to medium term trend has turned up. 

The MACD even though is in negative territory has given a buy signal. ROC & RSI too have given a buy signal. 

The O.I.PCR is quite healthy at 1.37. 4300 and 4100 strike prices are seeing lot of PUT writing suggesting support at these areas. 

The Trendline resistance for Nifty is at 4305-4192. 

For the week ahead, the Resistance is at 4439-4586-4693. Support is at 4305-4206-4092. 

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

4092

4206

4305

4374

4439

4586

4693

Sensex

14016

14241

14497

14744

14930

15257

15600

LAST WEEKS RECOMMENDATIONS. 

In spite of such a powerful pullback witnessed by the markets all our targets were achieved except HDFC. 

STOCK

Reco. PriceTgtReachedLot Size Profit
Sell  JP Asso.1861781701125Rs.18,000
Sell Siemens410393376752Rs.25,568
Sell Rel. Capital742708700276Rs.11,592
Sell Axis Bank738713707450Rs.13,950
Sell HDFC219820922146150Rs.7,800
    PROFITRs.76,910

THIS WEEK’S RECOMMENDATIONS:

  

STOCK

CMPSLTgt-1Tgt-2
Buy Tech Mah.734705779860
Buy NTPC205203210216
Buy JSW Steel600585635656
Buy Thermax446426469507
Buy LITL376364390412

WATCH OUT FOR:  

Tech Mahindra

Rolta

 

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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