Weekly analysis : STILL IN TRADING RANGE; BIAS TURNS NEGATIVE - 14/06/2019

STILL IN TRADING RANGE; BIAS TURNS NEGATIVE - 14/06/2019.

 

DRIFTING LOWER DOWN THE RANGE.

 

Nifty still continues to remain in Trading Range between 12103-11614. But for the past 5 trading sessions, each day’s candle body lay in the trading range of 6th May 2019 (12039-11830). Last hour on Friday saw serious sell-off which dragged the indices lower, such that the closing was below the low of the trading range of 6th May i.e. below Nifty 11830. The inability of the Market to sustain at higher levels has resulted in the Market moving lower with the bias turning negative. This has opened the way to test the higher bottom at 11769, followed by critical weekly Support in the form of Bullish Gap between 11591-11426.

 


STILL IN TRADING RANGE; BIAS TURNS NEGATIVE - 14/06/2019.

 

DRIFTING LOWER DOWN THE RANGE.

 

Nifty still continues to remain in Trading Range between 12103-11614. But for the past 5 trading sessions, each day’s candle body lay in the trading range of 6th May 2019 (12039-11830). Last hour on Friday saw serious sell-off which dragged the indices lower, such that the closing was below the low of the trading range of 6th May i.e. below Nifty 11830. The inability of the Market to sustain at higher levels has resulted in the Market moving lower with the bias turning negative. This has opened the way to test the higher bottom at 11769, followed by critical weekly Support in the form of Bullish Gap between 11591-11426.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 39787, made a high of 40066, low of 39363 and closed the week at 39452. Thus it closed the week with a loss of 163 points. At the same time the Nifty opened the week at 11934, made a high of 12000, low of 11797 and closed the week at 11823. Thus the Nifty closed the week with a loss of 47 points.

 

On the daily charts, both Sensex and Nifty have formed a Opening Black body Marubuzo. On the weekly charts, both the indices have formed a smaller than a Real Black body. Thus Candlestick pattern study suggests a Bearish bias.

 

Both the indices are moving in a Trading Range between Sensex 40312-38651 & Nifty 12103-11614. A bullish breakout will see Sensex reaching Cup & Handle target of 41053 and Nifty 12232. A bearish break will take the indices to support of Weekly Bullish Gap.

 

Both the indices have left behind a Bullish Breakaway Gap not only on the daily time-frame but also on weekly time-frame. This Bullish Gap between Sensex 38570-38001 and Nifty 11591-11426 will now act as strong Support Zone.

 

Both the indices had completed a Bullish Cup & Handle pattern in March 2019 and now they are heading towards their target of Sensex 41053 and Nifty 12232. Also a Rounding Bottom got completed, which has a target of Sensex 44687 & Nifty 13516.

 

Both the indices have closed this week below the short term average of 20dma (Sensex – 39513 and Nifty – 11856). Both the indices continue to remain above the medium term average of 50dma (Sensex – 38903 and Nifty 11680) as well as the long term average of 200dma (Sensex – 36902 and Nifty – 11092). Thus the Trend in the medium term and long term Timeframe continues to be Bullish, whereas the Trend in the short term Timeframe has turned Bearish.

 

MACD and Price ROC are both in Sell mode. RSI (51) suggests Bullish momentum. Stochastic Oscillator %K (47) is below %D and hence in Sell mode. ADX (34) suggests Uptrend under consolidation. Directional Indicators are still in Buy mode as +DI is above –DI. MFI (61) suggests Positive Money Flow. Thus Oscillators are suggesting a mixed bias.

 

Options data for June series indicate highest Call Open Interest is at 12000 and the highest Put build-up is still at the strike of 11500. Thus Options data suggests a trading range with resistance at 12000 and strong support at 11500.

 

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

11484

11614

11727

11823

11958

12041

12137

Sensex

38236

38651

39041

39452

39828

40312

40662

 

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy TCS

2254

2219

2307

2361

Buy TeamLease

3099

3038

3195

3293

Buy P I Ind

1170

1148

1204

1239

Buy Intellect

274

269

284

295

Buy Redington

104

101

109

115

 

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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