Archives : SENSEX - 20000 & NIFTY - 6000 CONQUERED
SENSEX – 20000 & NIFTY – 6000 CONQUERED - 24/09/2010.
 

BACK TO WHERE THE MARKET BELONGS.

 

The market is where it belongs i.e. Sensex above 20000 and Nifty above 6000. Market is rising with a vengeance and is making up for lost time by rocketing upwards. It has reached the levels last seen in Jan 2008. The speed of increase has been surprising to say the least and it has not given any respite to the bear cartel to cut their short positions. Every small dip has been bought, even in intraday. Even though certain momentum oscillators continue to remain in overbought territory, but as we mentioned last time, the oscillators can remain there for days and weeks together. The upward momentum is likely to continue even in this week as this is the expiry week and the bulls will not like to loosen their grip on the market.


SENSEX – 20000 & NIFTY – 6000 CONQUERED - 24/09/2010.
 

BACK TO WHERE THE MARKET BELONGS.

 

The market is where it belongs i.e. Sensex above 20000 and Nifty above 6000. Market is rising with a vengeance and is making up for lost time by rocketing upwards. It has reached the levels last seen in Jan 2008. The speed of increase has been surprising to say the least and it has not given any respite to the bear cartel to cut their short positions. Every small dip has been bought, even in intraday. Even though certain momentum oscillators continue to remain in overbought territory, but as we mentioned last time, the oscillators can remain there for days and weeks together. The upward momentum is likely to continue even in this week as this is the expiry week and the bulls will not like to loosen their grip on the market.

 
TECHNICALLY SPEAKING. 

The Sensex opened the week at 19445, made a high of 20105, a low of 19445 and closed the week at 20045. The Sensex gained a whopping 451 points on a weekly basis. Similarly Nifty opened the week at 5885, made a high of 6037, a low of 5885 and closed the week at 6018. The Nifty too closed with the week with a solid gain of 164 points. Thus the market has managed a close above Sensex 20000 and Nifty above 6000 after Jan 2008.

 

On the weekly charts both Sensex and Nifty have formed an Opening White body Marubuzo for the third consecutive week. This is a Bullish candlestick pattern and the last three weeks candle forms a strong bullish pattern in the form of Three White Soldiers. The bullish implications of this formation will be seen once again in the next week. On Friday, as per the daily charts, both the indices have formed a Bullish Engulfing pattern which is a strong bullish reversal pattern.

 

Since last October, the market is moving in a Rising Channel and the channel top had provided strong resistance to the market and that supply trendline top was breached and as a result both the indices have closed above their respective Trendline tops and hence a bullish breakout is in place. Due to this Rising Channel Breakout, the target for the Sensex will be at 20627 and Nifty 6180.

 

Let us consider the Bullish Inverted Head and Shoulders formed on the weekly charts. Sensex fell from 15579 in Aug 08 to 7697 in Oct 08. The target for this fall according to the Golden Ratio is at Sensex 20450. Similarly Nifty fell from 4649 in Aug 08 to 2252 in Oct 08 and the target according to the Golden Ratio falls at Nifty 6130.

 

If we check the above two points for target determination, then one can safely assume that the short term target for the Sensex will be anywhere between 20450-20627. On a similar basis, Nifty will have a target between 6130-6180.

 

In the current upmove both the indices have rebounded from Sensex 17819 and Nifty 5348 and in the process have registered higher bottoms. Sensex has formed higher bottoms at 17819-17373 and Nifty has formed higher bottoms at 5348-5210. The uptrend will be in danger only if both the indices close below their higher bottoms i.e. Sensex – 17819 and Nifty – 5348.

 

On the moving averages front, both the indices are well above their 20dma (Sensex – 19008 and Nifty – 5709) and 50dma (Sensex – 18478 and Nifty – 5549) hence the short and medium term trend are positive.

 

Majority of the oscillators are showing strength and continue in Buy mode. MACD and ROC continue with their Buy signals besides being in positive territory. The momentum oscillator like the RSI (77) is in overbought territory while the Stochastic oscillator (75) is not in overbought territory but has given a Sell signal. Here one needs to remember that the market may or can remain in overbought territory for days together. Also the momentum is the highest when in overbought zone. The ADX has increased and is currently at 44 which indicate that the current trend is gaining strong momentum and the trend is now maturing. The Directional Indicators are already in Buy mode. The MFI is in Buy mode and so is the OBV.

 

For those who had written 5900 and 6000 Calls for the next month series had to cover their shorts and as a result the Call writers have lost confidence and Put writing is gaining currency. For the next month, strong build up is seen at the 5800 Put followed by 5600 Put. One can expect the Nifty to have support at around 5800.

 

For the week ahead, Sensex will find Support at 19845-19621-19424 and will find Resistance at 20238-20439-20627.

 

For the week ahead, Nifty will find Support at 5966-5901-5825 and will find Resistance at 6077-6142-6207.

 
INDEX LEVELS:
 
 S3S2S1CLOSER1R2R3
Nifty5825590159666018607761426207
Sensex19424196211984520045202382043920627
  
LAST WEEKS RECOMMENDATIONS: Bulls Eye as all the recommendations reached their targets with ease and we achieved 100% success. The star performer for the week was Jindal S-W which increased by a whopping 17%.
 
STOCKReco. PriceTgtReachedLot SizeProfit
Buy JindalS-W179918972084125Rs.35,625
Buy LiCHsg131713631369250Rs.13,000
Buy RelMedia2152212231000Rs.8,000
Buy L&T196320132075125Rs.14,000
Buy JSW Stl125612801300250Rs.11,000
    TotalRs.81,625
  
THIS WEEKS RECOMMENDATIONS:
  
STOCKCMPSLTgt-1Tgt-2
Buy OFSS2258223422992357
Buy JindalS-W2067202321392213
Buy Aban860844886915
Buy LiCHsg1352133113841417
Buy HeroHonda1863183618951933
  

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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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