Weekly analysis : MID-CAP RALLY TO GAIN MOMENTUM - 17/08/2018

MID-CAP RALLY TO GAIN MOMENTUM - 17/08/2018.


NIFTY HEADED FOR 12000.

 

After a brief pause, the market resumed its upward rally and now is targeting much higher levels. After crossing the life-high levels; Nifty is likely to go for the target zone of 11907-12391. The markets were expected to take support at the Bullish Gap mentioned last week and it did. This clearly shows that the market refuses to go down and all Corrections are likely to be shallow. As a result, the strength shown by the frontline stocks is likely to rub-off on the mid-caps and small-caps. Mid-Cap 50 Index has closed decisively above the strong Resistance of 5100 and the critical 200dma.

 


MID-CAP RALLY TO GAIN MOMENTUM - 17/08/2018.


NIFTY HEADED FOR 12000.

 

After a brief pause, the market resumed its upward rally and now is targeting much higher levels. After crossing the life-high levels; Nifty is likely to go for the target zone of 11907-12391. The markets were expected to take support at the Bullish Gap mentioned last week and it did. This clearly shows that the market refuses to go down and all Corrections are likely to be shallow. As a result, the strength shown by the frontline stocks is likely to rub-off on the mid-caps and small-caps. Mid-Cap 50 Index has closed decisively above the strong Resistance of 5100 and the critical 200dma.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 37693, made a high of 38022, low of 37559 and closed the week at 37947. Thus it closed the week with a gain of 78 points. At the same time the Nifty opened the week at 11369, made a high of 11486, low of 11340 and closed the week at 11470. Thus the Nifty closed the week with a gain of 41 points.

 

On the daily charts, both Sensex and Nifty has formed a white body candle. On the weekly charts, both the indices have formed a Real White body candle which in combination with previous weeks candle is forming a Side by Side White Lines pattern which is a Bullish Continuation pattern. Thus daily as well as weekly charts suggest a continuation of Bullish bias.

 

This week, both the indices took Support at the first Bullish Gap between 37643-37582 for the Sensex and 11370-11368 for the Nifty. It is now a critical Support for the short term. A break of this Support will lead the market towards the testing of another Bullish Gap between Sensex 37131-37061 and Nifty 11210-11185. Both these Gaps will act as strong Support Zones.

 

Both Sensex and Nifty have completed a Rounding Bottom formation and the Target as per that pattern falls at Sensex 40403 and Nifty 12391. Also both the indices had completed a Bullish Cup and Handle pattern which has a target of Sensex 39503 and Nifty 11907. The above targets will be achieved as long as Sensex remains above 34937 and Nifty above 10557.

 

This week, both the indices were above the short term average of 20dma (Sensex – 37440 and Nifty – 11310) as well as medium term average of 50dma (Sensex – 36423 and Nifty – 11015). Also both the indices continue to remain above the long term average of 200dma (Sensex – 34716 and Nifty – 10618). Thus the trend in short term, medium term as well as long term time-frame remains Bullish.

 

MACD is in Sell mode whereas Price ROC is in Buy mode. RSI (66) suggests strong bullish momentum. Stochastic Oscillator %K (78) is above %D and hence in Buy mode. ADX has increased to 38, suggests a very strong Uptrend. Directional Indicators continue in Buy mode as +DI is above –DI. MFI (65) suggests Positive Money Flow. OBV is making higher top higher bottom formation. Thus Oscillators suggest a bullish bias.

 

Options data for August series indicate highest Call Open Interest is at the strike of 11500 whereas the highest Put build-up is at the strike of 11000. Thus Options data suggests a trading range with resistance at 11500 & support at 11000.


INDEX LEVELS:


 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

11117

11244

11366

11470

11578

11682

11777

Sensex

36740

37134

37582

37947

38543

38889

39262


THIS WEEKS RECOMMENDATIONS:


STOCK

CMP

SL

Tgt-1

Tgt-2

TorrentPharma

1765

1735

1811

1859

Buy HUL

1784

1754

1829

1877

Buy AstraZenca

1838

1798

1899

1973

Buy STAR

449

440

463

478

Buy IDFC

52

50

56

60


WATCH OUT FOR:

 

HUL
 
STAR

 

 

 

 

 

 


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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