Archives : BEARS WIN IN FM V/S HM FIGHT - 23/09/2011.

BEARS WIN IN FM v/s HM FIGHT – 23/09/2011.

G-LOCAL FACTORS PULL-DOWN THE MARKET. 

When the FED refused the QE 3 and made bearish observation as regards the US and Europe, the global markets went into a tailspin. Our market had to bear a double blow as the fight between the current FM and HM came into public domain. Just a comment regarding P.Chidabaram’s involvement in the telecom scandal sent shivers down the market’s spine. The market tanked as the Sensex lost more than 700 points in a day. The support at 4911 Nifty was effortlessly breached. The good work of the bulls of the last three weeks was undone in a matter of two trading sessions.

 

MAJOR RESISTANCE AT NIFTY - 5169.

 

The indices were in a pull-back mode after taking support at Sensex 16374 and Nifty 4911. The rally turned to be sharp and deceptive as both Sensex and Nifty once again went higher to reach just the lower boundary line of the Descending Triangle as seen in the weekly chart. The rally fizzled out as the indices once again failed to break into the Descending Triangle formation. This was their third unsuccessful attempt in as many weeks. This clearly marks out the level of Sensex 17211 and Nifty 5169 as the critical level to beat for the Bulls. Only a close above these levels will allow any meaningful rallies to happen.

 

 

 

  

BEARS WIN IN FM v/s HM FIGHT – 23/09/2011.

G-LOCAL FACTORS PULL-DOWN THE MARKET. 

When the FED refused the QE 3 and made bearish observation as regards the US and Europe, the global markets went into a tailspin. Our market had to bear a double blow as the fight between the current FM and HM came into public domain. Just a comment regarding P.Chidabaram’s involvement in the telecom scandal sent shivers down the market’s spine. The market tanked as the Sensex lost more than 700 points in a day. The support at 4911 Nifty was effortlessly breached. The good work of the bulls of the last three weeks was undone in a matter of two trading sessions.

 

MAJOR RESISTANCE AT NIFTY - 5169.

 

The indices were in a pull-back mode after taking support at Sensex 16374 and Nifty 4911. The rally turned to be sharp and deceptive as both Sensex and Nifty once again went higher to reach just the lower boundary line of the Descending Triangle as seen in the weekly chart. The rally fizzled out as the indices once again failed to break into the Descending Triangle formation. This was their third unsuccessful attempt in as many weeks. This clearly marks out the level of Sensex 17211 and Nifty 5169 as the critical level to beat for the Bulls. Only a close above these levels will allow any meaningful rallies to happen.

 

 

 

Nifty Desc Triangle

 

 

 

TECHNICALLY SPEAKING.

The Sensex opened the week at 16865, made a high of 17191, a low of 16052 and closed the week at 16162. The Sensex lost 771 points on a weekly basis. Similarly Nifty opened the week at 5068, made a high of 5168, a low of 4829 and closed the week at 4867. The Nifty too closed with a weekly loss of 217 points.

 

Both Sensex and Nifty have made a big black body Bearish candle on the weekly charts which has undone the pull-back of the last three weeks. On the daily charts, the fall was sharp and after a gap down opening on Friday, the Nifty has managed to form a Doji. The last two days together form a Bullish candlestick Reversal pattern known as Bullish Doji Star. This pattern requires a confirmation and hence a white candle, if formed on Monday, will confirm a Bullish Reversal. Thus we may see some sort of minor pull-back but the bearish formation on the weekly charts will exert itself on the daily formation and push the market lower.

 

Both the indices once again fell from Sensex 17191 and Nifty 5168. While falling lower both the indices have left behind a Breakaway Gap i.e. between Sensex 16833-17000 and Nifty 5059-5109. This gap is also a Bearish Falling Gap and hence will act as a strong resistance area.

 

Both Sensex and Nifty have once again closed below their short term average of 20dma (Sensex -16675 and Nifty – 5006), and hence the short term trend has once again turned down. The market is well below the medium term average of 50dma (Sensex – 17277 and Nifty – 5193) and long term average of 200dma (Sensex – 18397 and Nifty – 5520). As a result the medium term and the long term trends continue to remain down.

 

The Pull-back once again halted at Sensex 17191 and Nifty 5168 which happens to be just below the previous week’s level where the pull-back was stopped and i.e. at Sensex 17211 and Nifty 5169. Besides these minor tops, there is a convergence of various resistance levels like the Trendline Resistance, 38.2% of the intermediate fall and the presence of 50dma. Thus we have strong Resistance zone formed at Sensex 17178-17311 and Nifty 5150-5193.

 

From a broader perspective the market is correcting the entire rise from 7697 to 21108 for the Sensex and 2252 to 6338 for the Nifty. If the market breaches the recent low of 15765 for the Sensex and 4720 for the Nifty, then the market is likely to move towards the 50% and 61.8% levels of the entire fall for the Sensex and Nifty. Those levels are 14402-12820 for the Sensex and 4295-3813 for the Nifty.

 

Both Sensex and Nifty had given a weekly Bearish Head & Shoulders breakout and after that the weekly Bearish Descending Triangle also got completed. The target for Bearish Head and Shoulders falls at 14651-13928 for the Sensex and 4357-4143 for the Nifty. The target for the Bearish Descending Triangle falls at Sensex 13952 and Nifty 4200. On a smaller degree, there is a Bearish Cup and Handle formation and the target for that falls at 14789 for the Sensex and 4437 for the Nifty. On a still smaller degree on the daily charts there is a Bearish Breakout for an Ascending Triangle formation and the targets for which should be Sensex 15306 and Nifty 4572.

 

MACD continues with its Buy signal even though in a negative territory. ROC has turned negative and hence it is a Sell signal. RSI has given a Sell signal as once again it has fallen below the centerline and is currently at 38. The Stochastic oscillator has given a Sell signal as %K is below %D. %K is at 32. Directional Indicators have also given a Sell signal as +DI has moved lower below –DI. ADX has moved lower at 22 suggesting that the current trend has lost lot of its strength. OBV continues with its lower top and lower bottom formation and hence continues with its Sell signal. Money Flow on the other side continues with its Buy signal as it is still at 65. Oscillators overall are suggesting a continuation of bearishness.

 

Nifty OI PCR has fallen and is currently at 1.19. For the Oct series, highest Call writing is seen at 5200 strike price and very high Put writing is seen at 4700 strike. Thus in the near term, one can expect the Nifty to oscillate between 5200 on the higher side and 4700 on the lower side. Very strong buildup is also seen at 4500 Put. Thus if the Nifty breaches the short term support of 4700, then option data suggests that the Nifty will take support at the level of 4500.

 

Trendline Resistance for the Sensex is at 17178. Trendline Support for the Sensex is at 15552.

 

Trendline Resistance for the Nifty is at 5150. Trendline Support for the Nifty will be at 4655.

 

For the week ahead, Sensex will find Support at 15876-15600-15332 and will find Resistance at 16546-16889-17256.

 

For the week ahead, Nifty will find Support at 4786-4693-4620 and will find Resistance at 4965-5068-5169.

INDEX LEVELS: 

 S3S2S1CLOSER1R2R3
Nifty4620469347864867496550685169
Sensex15332156001587616162165461688917256

LAST WEEKS RECOMMENDATIONS:

All the recommendations reached their targets with the exception of IRB. The Star performer of the week was NCC which went up by more than 6%. 

STOCKReco. PriceTgtReachedLot SizeProfit
Buy Educomp237245252500Rs.7,500
Buy CentBnk1041081072000Rs.6,000
Buy HDiL1091141152000Rs.12,000
Buy IRB1731781762000Rs.6,000
Buy NCC6972744000Rs.20,000
    TotalRs.51,500

THIS WEEKS RECOMMENDATIONS: 

STOCKCMPSLTgt-1Tgt-2
Sell BaTa660668646621
Sell BemL455462445433
Sell ABB751761735717
Sell HDFC625632615603
Sell BFUtiL483491470456

WATCH OUT FOR:

Bata

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