Archives : NIFTY SUPPORT ZONE 5145-5135 - 13/04/2012.

NIFTY SUPPORT ZONE 5145-5135 – 13/04/2012.  

INFOSYS, EUROPE DRAG DOWN THE MARKET.

It was Friday the 13th and the market started the day on the back-foot as Infosys delivered poor quarterly results and an even worse guidance. The market survived this fall of 10% by Infosys till afternoon when the market suddenly started cracking. This was because of weakness in Europe. Market now keenly awaits the RBI’s policy review meet next Tuesday for further trigger. Nifty continues to move in a range of 5150 to 5400. Friday’s fall has pushed the Nifty lower near the support zone which is between 5145-5135.


NIFTY SUPPORT ZONE 5145-5135 – 13/04/2012.  

INFOSYS, EUROPE DRAG DOWN THE MARKET.

It was Friday the 13th and the market started the day on the back-foot as Infosys delivered poor quarterly results and an even worse guidance. The market survived this fall of 10% by Infosys till afternoon when the market suddenly started cracking. This was because of weakness in Europe. Market now keenly awaits the RBI’s policy review meet next Tuesday for further trigger. Nifty continues to move in a range of 5150 to 5400. Friday’s fall has pushed the Nifty lower near the support zone which is between 5145-5135.

TECHNICALLY SPEAKING. 

Sensex opened the week at 17407, made a high of 17407, low of 17027 and closed the week at 17094. Thus it registered a weekly loss of 392 points. At the same time the Nifty opened the week at 5282, made a high of 5306, low of 5185 and closed the week at 5207. Thus the Nifty went down by 115 points on a weekly basis.

Friday’s black body formation spoiled the small upmove which was being developed over the past couple of days. It was a Key Reversal Bar where the indices went above the previous days high and then collapsed and closed the near the lows of the day. Interestingly it has occurred when there was no clear prior trend and the indices were moving sideways and hence the significance of this Key Reversal Bar reduces. Last two days formation on the Nifty could have been Bearish Separating Lines, had the opening for both the days been the same and there was no upper shadow on Friday’s candle. But the opening for both Thursday and Friday is slightly different and also there is a very long upper shadow on Friday’s candle formation. Long upper shadow on Friday shows strong selling pressure at higher levels. There is a black body formation on the weekly charts as well. Hence both daily and weekly charts suggest bearishness in the near term.

Both the indices are now well below the short term average of 20dma (Sensex – 17322 and Nifty – 5269) and medium term average of 50dma (Sensex – 17570 and Nifty – 5338). Still both the indices have managed to remain above the long term average of 200dma (Sensex – 17076 and Nifty – 5145). As a result, the trend in the Short term and Medium term timeframe remains Bearish. The trend in the Long term timeframe continues to be Bullish.

Two weeks back the Nifty went up leaving behind a Bullish Rising Gap between 5203 – 5194. This gap acted as a Support for the market twice during this week.

The market has made an intermediate bottom at Sensex 16920 and Nifty 5135. Only if this intermediate bottom is breached, the correction will resume and a lower top lower bottom formation will continue. The market will once again correct the entire rise from Sensex 15135 to 18523 and Nifty from 4531 to 5629 and the Correction levels will be 17229-16829-16429 for the Sensex and 5210-5080-4950 for the Nifty.

Market went down upto the level of the Falling Channel Top twice in March and it acted as a strong support. Currently the Falling Channel Top comes in at Sensex 16878 and Nifty 5093. These levels should provide strong support for the market. The overall bullish long term target for Falling Channel pattern breakout remains intact. The targets as per this formation are Sensex 20383 and Nifty 6148.

A strong support is likely to emerge between Sensex 17076 – 16878 and Nifty 5145-5093 which is a result of confluence of immediate current bottom, critical level of 200dma and the Falling Channel Top.

MACD is in the negative zone and continues with its Sell signal. ROC is in the positive zone and has managed to give a Buy. RSI (44) continues to remain below the centerline and thus in Sell mode. Stochastic Oscillator (40) continues in Sell mode as %K is below %D. ADX has remained constant at 14 suggesting that the market is trendless. Directional Indicators are also in Sell mode as +DI is below –DI. MFI is in Sell mode as it is below the centerline at 36. OBV continues moving sideways.

Nifty O.I. PCR has reduced and is at 1.13. Highest open interest buildup is seen at 5400 Call. Thus in the immediate future, Nifty will find strong resistance at 5400. High Put writing is seen at the strike of 5200, followed by the strike of 5100. One can expect support for the market to come in between 5200-5100.

Trendline Resistance for the Sensex is at 17459. The Trendline Support for the Sensex is at 16878.

Trendline Resistance for the Nifty is at 5311. The Trendline Support for the Nifty falls at 5093.

For the week ahead, Sensex will find Support at 16824-16549-16282 and will find Resistance at 17398-17687-18001.

For the week ahead, Nifty will find Support at 5113-5015-4921 and will find Resistance at 5305-5399-5499.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

4921

5015

5113

5207

5305

5399

5499

Sensex

16282

16549

16824

17094

17398

17687

18001

LAST WEEKS RECOMMENDATIONS: 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy BGR

355

363

369

1000

 14,000

Dhanlakshmi

75

79

79

4000

 16,000

TTKPrestige

3215

3319

3400

125

 23,125

GujFlouro

527

542

527

500

    -

STFC

612

631

620

500

  4,000

Total

 57,125

THIS WEEKS RECOMMENDATIONS:

This week is expected to be very volatile and hence Pair Strategies are suggested. 

PAIR NO.

STOCK

CMP

SL

TGT - 1

TGT -2

1

Buy

JsW Steel

739

723

759

781

Sell

ReLInfra

546

555

532

515

2

Buy

Sun Pharma

585

577

599

614

Sell

Ambuja

163

166

158

153

3

Buy

HeroMoto

2056

2032

2093

2135

Sell

JindalSaw

157

160

152

147

  WATCH OUT FOR:

JSW Steel

Ambuja

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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