Archives : CONSOLIDATION WITH A NEGATIVE BIAS - 12/10/2012.

CONSOLIDATION WITH A NEGATIVE BIAS – 12/10/2012.

NOW WEEKLY BEARISH ENGULFING.

First it was on the daily charts, now the Bearish Engulfing pattern has occurred on the weekly charts. As a result the market has currently halted the upward movement and is currently digesting its gains; which has resulted in the market retracing in the short term time-frame. The immediate Retracement levels for the Sensex are at 18416-18193-17971 and 5586-5515-5444 for the Nifty. Downward price movement upto the Retracement levels, is healthy for the market and will not change the trend of the market. Indices are witnessing profit booking because the indices have achieved primary pattern target at Sensex 19116 and Nifty 5788. Bearish Engulfing on the daily charts and weekly charts will be negated, if we have a close above Nifty 5815.

 

  


CONSOLIDATION WITH A NEGATIVE BIAS – 12/10/2012.

NOW WEEKLY BEARISH ENGULFING.

First it was on the daily charts, now the Bearish Engulfing pattern has occurred on the weekly charts. As a result the market has currently halted the upward movement and is currently digesting its gains; which has resulted in the market retracing in the short term time-frame. The immediate Retracement levels for the Sensex are at 18416-18193-17971 and 5586-5515-5444 for the Nifty. Downward price movement upto the Retracement levels, is healthy for the market and will not change the trend of the market. Indices are witnessing profit booking because the indices have achieved primary pattern target at Sensex 19116 and Nifty 5788. Bearish Engulfing on the daily charts and weekly charts will be negated, if we have a close above Nifty 5815.

TECHNICALLY SPEAKING. 

Sensex opened the week at 18969, made a high of 18969, low of 18581 and closed the week at 18675. Thus it registered a weekly loss of 263 points. At the same time the Nifty opened the week at 5751, made a high of 5751, low of 5636 and closed the week at 5676. Thus the Nifty went down by 70 points on a weekly basis.

This week has completed a Bearish Engulfing on the weekly charts which is a bearish reversal pattern. On the daily charts a Bearish Harami pattern has been formed but it has not formed at the top and hence it cannot be treated as a bearish pattern. The Bearish Engulfing pattern on the weekly as well as daily charts (last Friday) will stand negated if Sensex closes above 19137 and Nifty above 5815.

The profit booking being witnessed since last two weeks is a result of the price reaching the target of the primary basic pattern which was at Sensex 19116 and Nifty 5788. The primary basic pattern was due to the fall from Sensex 17432 to 15748 and Nifty 5279 to 4770.

A fall below Sensex 18581 and Nifty 5636 will once again resume the retracement of the immediate rise of Sensex from 17250 to 19137 and 5215 to 5815 for the Nifty. The Retracement levels for the Sensex are at 18416-18193-17971 and 5586-5515-5444 for the Nifty.

A Bullish Rising Gap between Sensex 18062-18284 and Nifty 5447-5526 has acted as a strong support for the market before as the Sensex had bounced back from a low 18291 and Nifty 5534. This gap holds more significance because the 50% Retracement of the immediate rise from 17250 to 19137 for the Sensex and 5215 to 5815 for the Nifty (which is at 18193 and 5515) is also within the Gap mentioned above.

On the weekly charts, both Sensex and Nifty have formed a Bullish Diamond pattern and the target as per this formation is Sensex 20171 and Nifty 6192. The targets will be achieved as long as the market stays above Sensex 15748 and Nifty 4770.

This week the short term average of 20dma (Sensex – 18663 and Nifty – 5661) was tested thrice without getting breached. Hence the short term trend has survived. Also both Sensex and Nifty continue to be well above their medium term average of 50dma (Sensex – 18020 and Nifty – 5460) and the long term average of 200dma (Sensex – 17263 and Nifty – 5232). Thus the trend in the short term, medium term and the long term timeframe continue to be bullish.

Market had tested the Falling Channel Top and bounced back from there. Hence the overall long term target for Falling Channel pattern breakout remains intact. The targets as per this formation are Sensex 20383 and Nifty 6148.

MACD even though positive has given a Sell signal this week. While ROC is just above the centerline and hence continues with its buy signal. RSI has fallen to 57 and indicates a fall in bullish momentum. Stochastic Oscillator is in Sell mode as %K is below %D and also it continues to remain overbought with %K at 85. ADX continues to be higher at 40. The Directional Indicators i.e. +DI and –DI continue with their buy signal but are converging now. Money Flow still continues above the centerline at around 63. OBV continues to remain sideways. Bollinger Band continues with its Buy signal as the indices have not yet closed below the 20dma.

The Nifty O.I. PCR has reduced further to 0.92. Highest Open interest build up has shifted to 5800 Call and 5600 Put which suggests that the market expects a narrow trading range with strong support coming in at around 5600 and resistance at around 5800 levels. Friday saw increased Call writing at the strike of 5700 which means that the market will face immediate resistance at that level. November series has highest Call writing at 6000 strike and Put writing at 5500 strike. Hence one can expect a wider trading range of 5500 on the lower side and 6000 on the higher side for the medium term.

Trendline Support for the Sensex is at 17950. Trendline Resistance for the Sensex is at 19161.

Trendline Support for the Nifty falls at 5432. Trendline Resistance for the Nifty falls at 5822.

For the week ahead, Sensex will find Support at 18411-18161-17884 and will find Resistance at 18969-19263-19554.

For the week ahead, Nifty will find Support at 5575-5490-5393 and will find Resistance at 5752-5843-5937.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5393

5490

5575

5676

5752

5843

5937

Sensex

17884

18161

18411

18675

18969

19263

19554

LAST WEEKS RECOMMENDATIONS:

Majority of the recommendations did well and reached their targets with ease except for Opto Circuit, which missed just by a whisker. But the star performers of the week were Federal Bank and Bombay Dyeing which went up by around 8% and 7% respectively!!! 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

CoLPaL

1241

1262

1272

250

Rs. 7,750

Buy STFC

646

662

669

500

Rs.11,500

BomDye

538

557

575

500

Rs.18,500

FedBnk

457

486

494

500

Rs.18,500

OptoCkt

138

143

142

1000

Rs. 4,000

Total

Rs.60,250

THIS WEEKS RECOMMENDATIONS: 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy DivisLab

1142

1126

1167

1195

Buy BhushanSt

504

496

517

531

Buy Titan

274

270

281

289

Buy GMDC

205

201

212

220

Buy Ceat

117

114

122

128

WATCH OUT FOR:

Ceat

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