Archives : 5080 - 5060 - NIFTY SUPPORT ZONE

5080-5060 - NIFTY SUPPORT ZONE – 27/04/2012. 

MAY EXPECTED TO BE VOLATILE.

April series ended on a subdued note as the Nifty gyrated in a small range of 5170 to 5400. May series started on a cautious note with Nifty open interest lower than usual. But History has it that May is amongst the most volatile month and it might not be any different this time. Even as Stock Rollovers were above average, but the Rollover cost was lower which indicates short positions being rolled over to the May series. Banking, Capital Goods, Power saw short rollovers, whereas FMCG, Tech and Auto sector saw long rollovers.

 


5080-5060 - NIFTY SUPPORT ZONE – 27/04/2012. 

MAY EXPECTED TO BE VOLATILE.

April series ended on a subdued note as the Nifty gyrated in a small range of 5170 to 5400. May series started on a cautious note with Nifty open interest lower than usual. But History has it that May is amongst the most volatile month and it might not be any different this time. Even as Stock Rollovers were above average, but the Rollover cost was lower which indicates short positions being rolled over to the May series. Banking, Capital Goods, Power saw short rollovers, whereas FMCG, Tech and Auto sector saw long rollovers.

TECHNICALLY SPEAKING. 

Sensex opened the week at 17347, made a high of 17444, low of 17019 and closed the week at 17134. Thus it registered a weekly loss of 239 points. At the same time the Nifty opened the week at 5277, made a high of 5310, low of 5154 and closed the week at 5190. Thus the Nifty went down by 100 points on a weekly basis.

On the daily charts on Friday, both Sensex and Nifty has seen a Juji formation which is a long legged doji. Last two days amounts to a Low Price Bullish Harami Cross. Only area of concern being the long shadows formed on Friday. This is a Bullish Reversal pattern which requires a confirmation. On the weekly charts, there is a Bearish Harami Bottom being formed on both the indices. Bearish Harami usually forms at the top of an uptrend, but here it has formed in a downtrend suggesting that Selling pressure might subside.

Both Sensex and Nifty could not hold on to the short term average of 20dma (Sensex – 17280 and Nifty – 5255) and closed below it. As a result the short term trend has once again turned down. Both the indices continue to remain below the medium term average of 50dma (Sensex – 17488 and Nifty – 5317) but above the long term average of 200dma (Sensex – 17005 and Nifty – 5127). As a result, the trend in the Short term timeframe and the Medium term timeframe is Bearish. The trend in the Long term timeframe continues to be Bullish.

Both the indices faced resistance at the Downward Falling Gap between Sensex 17553-17570 and Nifty 5338-5344. This gap acted as a resistance three times, creating almost a Tweezer like formation. A short term upmove will begin only on a close above this gap.

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 16758 and Nifty 5060. 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.

Both the indices are encountering strong Resistance zone between Sensex 17488 - 17570 and Nifty 5317 – 5344 which is a result of the confluence of the current intermediate tops (Sensex 17530 and Nifty 5342), Downward Falling Gap and the 50dma. A close above this Resistance zone will ensure resumption in strong upward momentum.

A strong support is likely to emerge between Sensex 16829 - 16758 and Nifty 5080 -5060 which is a result of confluence of intermediate lows (Sensex 16758 and Nifty 5076), 50% Retracement level of the entire rise (Sensex 15135 to 18523 and Nifty 4531 to 5629) and the Falling Channel Top.

MACD and ROC are both negative and in Sell mode. RSI (45) continues to be below the equilibrium line and continues with its Sell. Stochastic Oscillator (24) is in Sell mode as %K is below %D. ADX is quite low at 14 indicating lack of direction in the market. Directional Indicators are in Sell mode as +DI is below –DI. MFI (30) too is under Sell mode, suggesting money flowing out of the market. The OBV continues to remain sideways.

Nifty O.I. PCR is at 1.19. Highest open interest buildup is seen at 5000 Put and 5600 Call. This suggests that the Nifty is likely to move in a broad range of 5000 to 5600. High Open Interest has been added to the 5100 Put and 5400 Call. Thus in the short term one can expect Nifty to move in small range of 5100 on the lower side to 5400 on the higher side. 

Trendline Resistance for the Sensex is at 17371. The Trendline Support for the Sensex is at 16758.

Trendline Resistance for the Nifty is at 5296. The Trendline Support for the Nifty falls at 5060.

For the week ahead, Sensex will find Support at 16828-16517-16214 and will find Resistance at 17436-17731-18040.

For the week ahead, Nifty will find Support at 5099-5011-4921 and will find Resistance at 5291-5393-5499.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

4921

5011

5099

5190

5291

5393

5499

Sensex

16214

16517

16828

17134

17436

17731

18040

LAST WEEKS RECOMMENDATIONS: 

STOCK

CMP

Tgt

Reached

Buy M&M

726

747

734

Buy HPCL

304

314

308

Buy TTKPrestige

3503

3597

3595

Buy BajajHldg

847

869

863

Buy IFCI

42

45

44

THIS WEEKS RECOMMENDATIONS: 

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell BoB

760

772

740

718

Sell YesBnk

348

354

339

329

Sell PFC

168

172

161

154

Sell BGR

329

335

318

306

Sell Cairn

335

341

326

316

WATCH OUT FOR:

Yes Bank

BGR

 

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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