Archives : HOMING PIGEON SEEN IN SENSEX - 13/05/2011.
HOMING PIGEON SEEN IN SENSEX – 13/05/2011.

.

The market witnessed lot of volatility before closing the week at almost the same level where it did last week. Even though the weekly gain or loss was not substantial, what is more critical is the formation of small body candle for the week, and that too after forming two big body black candles in the last two weeks. The weekly formation is a Black body Spinning Top formation which is a neutral formation. It has not only managed to halt the strong downward price movement but also raise a doubt regarding the downward price movement. The market will continue to remain in upward corrective mode in the short term time frame, till Sensex 18160 and Nifty 5443 remains intact. One can expect strong resistance for the Nifty around 5700-5750.

 

 

 


HOMING PIGEON SEEN IN SENSEX – 13/05/2011. 

.

The market witnessed lot of volatility before closing the week at almost the same level where it did last week. Even though the weekly gain or loss was not substantial, what is more critical is the formation of small body candle for the week, and that too after forming two big body black candles in the last two weeks. The weekly formation is a Black body Spinning Top formation which is a neutral formation. It has not only managed to halt the strong downward price movement but also raise a doubt regarding the downward price movement. The market will continue to remain in upward corrective mode in the short term time frame, till Sensex 18160 and Nifty 5443 remains intact. One can expect strong resistance for the Nifty around 5700-5750.

TECHNICALLY SPEAKING. 

The Sensex opened the week at 18628 made a high of 18724, a low of 18280 and closed the week at 18531. The Sensex made a minor gain of 13 points on a weekly basis. Similarly Nifty opened the week at 5575, made a high of 5605, a low of 5472 and closed the week at 5544. The Nifty closed with a minor loss of 7 points on a weekly basis.

 

On the daily charts, both the indices have made an Outside Day and many times that usually is a precursor of the probable increase in volatility in the coming few days. The Sensex has formed a Bullish Harami on the daily charts, which is a Bullish Reversal pattern. On the other hand the formation on the Nifty closely resembles a Bullish Harami line. On the weekly charts, both the indices have formed a Black body Spinning Top formation which is a neutral formation. This formation provides some sort of relief to the indices after two weeks of strong downward movement in form of two big body black candles. If we consider the last two weeks formation, then the Sensex has formed a Homing Pigeon formation which is a Bullish Reversal pattern. Even though this is a bullish reversal pattern, it requires a confirmation in the form of a white body candle for the next week. Nifty weekly formation for the last two weeks is almost like a Homing Pigeon, but not a Homing Pigeon.

 

Candlestick patterns point towards some sort of recovery in price as long as low of 18160 for the Sensex and 5443 for the Nifty is not violated. We have to consider a pull-back of the fall from 19811-18160 for the Sensex and 5944-5443 for the Nifty. The pull-back levels are 18790-18985-19180 for the Sensex and 5634-5693-5752 for the Nifty. Any move which surpasses the 61.8% retracement level i.e. Sensex 19180 and Nifty 5752, will mark the resumption of uptrend.

 

The market is well below the long term average i.e. 200dma (Sensex – 19171 and Nifty – 5754), medium term average of 50dma (Sensex – 18827 and Nifty – 5649) and short term average of 20dma (Sensex – 18945 and Nifty – 5682). As a result, all the three trends the short term, the medium term and the long term trends are down. In fact the short term, medium term and the long term averages are above the current market price and as a result, they will act as resistances going forward.

 

Any breach of recent low made two weeks back i.e. Sensex 18160 and Nifty 5443 will lead the market down to test the strong support line at Sensex 17745 and Nifty 5310. This is a very critical support line, and a breach of this support line will confirm a Bearish Head and Shoulders Reversal pattern. This will be herald a strong bear onslaught.

On the higher side the 50% pull-back level i.e. Sensex 18985 and Nifty 5693 coincides with the resistance formed by a bottom (Sensex 18954 and Nifty 5690). Above this, the 61.8% retracement level i.e. Sensex 19180 and Nifty 5752 coincides with the 200dma. Thus we have strong Resistance zone between 18954-19180 for the Sensex and 5690-5754 for the Nifty. 

All the major oscillators are in Sell mode. MACD and ROC both are in negative territory and continue with their Sell signals. RSI at 43, too continues with its Sell mode. Bollinger band which had given a Sell signal last week, continues with its Sell signal. Money Flow (41) has moved higher after being in oversold territory, but is still in Sell mode. OBV continues with its Sell signal. Stochastic oscillator has given a Sell signal as %K has cut %D from above. The Directional Indicators too continue with their Sell signal as +DI remains below –DI, but they are converging suggesting that the downtrend has lost some strength.

 

Nifty O.I. PCR has improved somewhat over the previous week but is still quite low at 0.86. Highest Call writing is seen at the strikes of 5800, which suggests presence of strong resistance around 5800. At the same time, highest Put writing is seen at the strike of 5400. Thus the level of 5400 is likely to provide strong support for the Nifty.

 

The Trendline Resistance for the Sensex is at 18979. The Trendline Support is at 18250.

 

The Trendline Resistance for the Nifty is at 5656. The Trendline Support is at 5468.

 

For the week ahead, Sensex will find Support at 18269-17982-17735 and will find Resistance at 18779-19003-19274.

 

For the week ahead, Nifty will find Support at 5472-5402-5329 and will find Resistance at 5634-5721-5801.

INDEX LEVELS:

 S3S2S1CLOSER1R2R3
Nifty5329540254725544563457215801
Sensex1773517982182691853118779 1900319274

LAST WEEKS RECOMMENDATIONS:

STOCKReco. PriceTgtReached
Buy ABB891917913
Buy BPCL666678670
Buy Orchid309316318
Buy JainIrrig185191189
Buy VGuard192201196

THIS WEEKS RECOMMENDATIONS:

STOCKCMPSLTgt-1Tgt-2
Buy OFSS2189216122322279
Buy McDowell1064105010891118
Buy HeroHonda1798177718291863
Buy GSPL104102108112
Buy PatelEngg152149158165

WATCH OUT FOR:

OFSS

McDowell

GSPL

  

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.

Copyright © 2000 - 2018 Jatin Sanghavi. All rights reserved.
No part of the material on this website may be reproduced or distributed in any forms or by any means, electronics or mechanical without the written permission of the author.
Sitemap