Archives : SENSEX BACK ABOVE 17000 - 20/11/2009

SENSEX BACK ABOVE 17000 – 20/11/2009. 

The first three days of the week saw the market consolidating near the top end of the current rally. But, Thursday saw the market breach the support level and moving down. On Friday the market went down once again to test the 50dma and once again surprised one and all by bouncing ferociously from that level. Before bouncing back Sensex took support at 16635 (50dma-16632) and Nifty bounced back from 4932 (50dma-4939). Both the indices have shown tremendous respect for the 50dma and hence it becomes a critical level which should not be breached for the current upmove to sustain.

 


SENSEX BACK ABOVE 17000 – 20/11/2009.

The first three days of the week saw the market consolidating near the top end of the current rally. But, Thursday saw the market breach the support level and moving down. On Friday the market went down once again to test the 50dma and once again surprised one and all by bouncing ferociously from that level. Before bouncing back Sensex took support at 16635 (50dma-16632) and Nifty bounced back from 4932 (50dma-4939). Both the indices have shown tremendous respect for the 50dma and hence it becomes a critical level which should not be breached for the current upmove to sustain.

THRILLING FRIDAY. 

The market started the day on a very weak note but saw a tremendous recovery in the last one hour of the trade. The Sensex bounced almost 400 points from the low and Nifty around 130 points. Short covering was one of the major reasons, besides the news of merger between 2 PSU Banks, for such a strong, sharp rally. The Bears had their stop losses triggered and as a result they were once again trapped. This further added fuel to the fire.

SENSEX. 

The Sensex opened the week at 16893, made a high of 17098, a low of 16635 and closed the week at 17021. The Sensex closed the week with a gain of 173 points, thus forming a small white body candle on the weekly charts. The Sensex was trading negative on a weekly basis till a sharp bounce was witnessed in the last hour of trade on Friday. On the daily charts on Friday, Sensex has formed a Bullish Reversal pattern called Bullish Engulfing.

On the weekly charts the small body formed is like a Star and if we consider the last three week’s white candles then the pattern resembles Stalled pattern which is neither Bullish nor Bearish.

Sensex has taken strong support once again at the 50dma which is currently at 16659, and hence this average should provide strong support.

When the Sensex manages a close above 17100, it will head towards a possible short term target of 17561.

The indicators are looking positive. The RSI (57) is moving up. The MACD & ROC continue with their buy signals.

The Sensex has Trendline resistance at 17476 and Trendline support at 16110.

For the week ahead, Sensex will face Resistance at 17195-17476-17735. Sensex will find Support at 16819-16635-16494.  

NIFTY. 

The Nifty opened the week at 4996, made a high of 5079, a low of 4932 and closed the week at 5052. The Nifty closed the week with a gain of 54 points, thus forming a small white body candle on the weekly charts. The Nifty was trading negative on a weekly basis till a sharp bounce was witnessed in the last hour of trade on Friday. On the daily charts, Nifty has formed a Bullish Reversal pattern called Bullish Engulfing.

On the weekly charts, Nifty formed a small body which is a neutral formation and if we consider the last three week’s white candles then the pattern resembles Stalled pattern which is neither Bullish nor Bearish.

Nifty has taken strong support once again at the 50dma which is currently at 4946, hence this average should provide strong support.

When the Nifty manages a close above 5079, it will head towards a possible short term target of 5226.

The indicators are looking positive. The RSI (57) is moving up. The MACD & ROC continue with their buy signals.

The Nifty has Trendline resistance at 5174 and Trendline support at 4808.

The Nifty strikes of 5000 and 4900 are showing lot of PUT writing; hence in case of a fall these levels will act as support.

For the week ahead, Nifty will face resistance at 5110-5174-5226. Nifty will find support at 4968-4904-4808. 

INDEX LEVELS: 

 S3S2S1CLOSER1R2R3
Nifty4808490449685052511051745226
Sensex16494166351681917021171951747617735

LAST TIMES RECOMMENDATIONS: 

Despite such a volatile week majority of our targets were achieved. L&T just missed the target by a whisker. 

STOCKReco PriceTgtReachedLot SizeProfit
Siemens558574580752Rs.16,544
FinTech140314811485150Rs.12,300
NagCon1681771752000Rs.14,000
IDFC1711771792950Rs.23,600
L&T164416781670200Rs.5,200
    TotalRs.71,644

STRATEGY CORNER:

This week we suggest a plain vanilla strategy in Idea. Idea is currently quoting at 50 and possible target for the stock is 55 to 57.

So buy 50CA November at 1.50 (Rs.4050) for a possible target of 4 to 6 (Expected Profit between Rs.6750 – Rs.12150).

If the Idea stock closes below 50 in the current expiry i.e. on Thursday, then maximum loss will be the premium paid i.e. Rs. 4050/=.

THIS WEEK’S RECOMMENDATIONS: 

STOCKCMPSLTGT-1TGT-2
Buy Jindal Saw872859901927
Buy OBC289283299314
Buy UCO Bank59586365
Buy JSW Steel9589379951044
Buy SBI2334229823842450

WATCH OUT FOR: 

 Jindal Saw

 

 OBC

 

 Jindal S-W

 

 Dena Bank

 

 

 

 

 
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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