Archives : MARKET CLOSES @ 2 YEAR LOW - 30/12/2011.

MARKET CLOSES @ 2 YEAR LOW   30/12/2011.

“Wish U a Very Happy & Successful Trading Year Ahead.” 

BULLS PRAY FOR BETTER 2012.

Sensex and Nifty ended the year 2011 on a bearish note, by closing at 25 month low. For the entire year, the bears held the upper hand, which saw the market lose around 25% from the top. The entire year can be termed as a year of correction, which saw the market correct the rise from the lows registered in 2008 (Sensex – 7697 and Nifty – 2252) to the highs in 2010 (Sensex – 21108 and Nifty – 6338). The year 2011 ended on a sour note without any sign or signal of revival. On the contrary, the bearish stance of the market is getting more and more pronounced. Market participants are praying for a better 2012 and the first step in that direction will be the formation of long term bottom.

NIFTY SUPPORT @ 4414.

Both Sensex and Nifty have once again closed the week below the 200 Weeks Moving Average (Sensex – 15874 and Nifty – 4766), which is a sign of concern. The Bearish Continuation candle-stick pattern of the last week, made sure that the market continues its southward journey, even this week. All these points to the market sliding lower to the bottom of the Downward Sloping Channel, which is likely to provide strong support (Sensex – 14756 and Nifty – 4414).

 

 


MARKET CLOSES @ 2 YEAR LOW   30/12/2011.

“Wish U a Very Happy & Successful Trading Year Ahead.” 

BULLS PRAY FOR BETTER 2012.

Sensex and Nifty ended the year 2011 on a bearish note, by closing at 25 month low. For the entire year, the bears held the upper hand, which saw the market lose around 25% from the top. The entire year can be termed as a year of correction, which saw the market correct the rise from the lows registered in 2008 (Sensex – 7697 and Nifty – 2252) to the highs in 2010 (Sensex – 21108 and Nifty – 6338). The year 2011 ended on a sour note without any sign or signal of revival. On the contrary, the bearish stance of the market is getting more and more pronounced. Market participants are praying for a better 2012 and the first step in that direction will be the formation of long term bottom.

NIFTY SUPPORT @ 4414.

Both Sensex and Nifty have once again closed the week below the 200 Weeks Moving Average (Sensex – 15874 and Nifty – 4766), which is a sign of concern. The Bearish Continuation candle-stick pattern of the last week, made sure that the market continues its southward journey, even this week. All these points to the market sliding lower to the bottom of the Downward Sloping Channel, which is likely to provide strong support (Sensex – 14756 and Nifty – 4414).

TECHNICALLY SPEAKING.

The Sensex opened the week at 15782, made a high of 16049, a low of 15406 and closed the week at 15454. The Sensex lost 277 points on a weekly basis. Similarly Nifty opened the week at 4718, made a high of 4800, a low of 4608 and closed the week at 4624. The Nifty too closed with a weekly loss of 90 points.

Both Sensex and Nifty have formed a black body candle on the weekly charts. The formation fell short of forming an Engulfing pattern. The weekly black body candle has long upper shadow which is indicative of the selling pressure at higher levels. On the daily charts, there is a black body formation on Friday, which is in line with the current bearishness. There were Three Black Candles formed on Tuesday, Wednesday and Thursday but the formation cannot be called Three Black Crows, because the candles have small bodies. Thus both daily and weekly candlestick patterns point to continuation of bearishness in the short term. 

Short term, Medium term and Long term Trends continue to be down. Both Sensex and Nifty are below their short term average of 20dma (Sensex – 15935 and Nifty – 4949), medium term average of 50dma (Sensex – 16460 and Nifty – 4940) and long term average of 200dma (Sensex – 17578 and Nifty – 5278). As a result the Short term, Medium term and Long term trend continue to be bearish. Besides this, both the indices have once again closed below their 200 Weeks moving average (Sensex – 15874 and Nifty – 4766). This clearly shows that the long term structure of the market is now under threat.

For more than a year, both the indices have been moving lower in a Falling Channel. In case of the indices breaching their recent lows, the market will fall to test the lower end of the Falling Channel, which should act as support. The support levels are at Sensex 14756 and Nifty 4414. The top end of the channel will provide resistance, is at Sensex 17574 and Nifty 5317. On a longer term timeframe the Bearish Head & Shoulders and Bearish Descending Triangle on the weekly charts still stand, and so do their targets. The target for the Bearish Head and Shoulders pattern on the weekly charts stands at Sensex 14651-13928 and Nifty 4357-4143. This target holds true as long as the Nifty stays below 5740.

Both Sensex and Nifty have formed another big Bearish Head & Shoulders pattern on the weekly charts. The targets for this bearish pattern are Sensex 10387 and Nifty 3080. This pattern is a derived pattern which has been completed even as the market is on the verge of achieving the targets of primary distribution pattern of Bearish Head & Shoulders and Bearish Descending Triangle as discussed in the above paragraph.

The market is correcting the entire rise from 7697 to 21108 for the Sensex and 2252 to 6338 for the Nifty. The market has already breached and is below the 38.2% of the above mentioned rise and hence it is likely to move towards the next Fibonacci Retracement levels of 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.

The Golden Ratio Target of the current rise of Sensex from 15765 to 17908 and Nifty from 4720 to 5399, falls at Sensex 14440 and Nifty 4300. This level coincides with the 50% Retracement level of the entire rise (Sensex – 14402 and Nifty – 4295) and hence we have a confluence zone between Sensex 14440-14402 and Nifty 4300-4295. This zone will act as strong support for both the indices.

MACD continues with its Buy signal even though in negative territory. ROC is in negative zone and continues with its Sell signal. RSI has moved lower to 39 and continues in its Sell mode. Stochastic Oscillator has given a Sell as %K is below %D. Directional Indicators are in Sell mode as +DI is below –DI. MFI is at 27 and is moving lower and continues to be in Sell mode. OBV continues in its Sell mode with its lower top, lower bottom formation. Thus oscillators point to continuation of bearishness in the next week.

Nifty OI PCR is at a low level of 1.08. Highest Open Interest is seen at 4500 Put. Highest Call writing is seen at 5000 strike. Hence one can expect Nifty to move in a band of 4500 on the lower side and 5000 on the higher side. Very high Open Interest has been added for the 4200 Put. This implies that in case the Nifty breaches the support of 4500, then the next significant support will be around 4200.

 

Trendline Resistance for the Sensex is at 16038. Trendline Support is at 15057.

Trendline Resistance for the Nifty is at 4790. Trendline Support falls at 4509.

For the week ahead, Sensex will find Support at 15130-14789-14452 and will find Resistance at 15765-16068-16374.

For the week ahead, Nifty will find Support at 4531-4448-4353 and will find Resistance at 4720-4818-4911.

INDEX LEVELS: 

 S3S2S1CLOSER1R2R3
Nifty4353444845314624472048184911
Sensex14452147891513015454157651606816374

LAST WEEKS RECOMMENDATIONS:

Almost all the stocks reached their targets with ease, except for SunTV which just missed the target by a whisker. The Star Performer of the week was Grasim. 

STOCKReco. PriceTgtReachedLot SizeProfit
Buy Grasim245625262548125Rs.11,500
Buy SunTV291298297500Rs.3,000
Buy Adani321329332500Rs.5,500
Buy Bhushan310317318500Rs.4,000
Buy UTVSoft99310111018250Rs.6,250
    TotalRs.30,250

THIS WEEKS RECOMMENDATIONS:

STOCKCMPSLTgt-1Tgt-2
Sell Kotak430436421411
Sell YesBnk238242232225
Sell AdaniEnt293301283273
Sell DLF183187177170
Sell MundraPort120123115109

WATCH OUT FOR:

Yes 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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