Archives : MARKET SLIDES ON RUPEE CONCERNS - 07/06/2013.

MARKET SLIDES ON RUPEE CONCERNS – 07/06/2013.

MEDIUM TERM TREND TURNS BEARISH.

The single biggest worry engulfing the market is the fast depreciating Rupee. Friday saw the Rupee crossing the 57 mark and is now nearing all time low levels. This does not spell good news for the market. Market continued with its fall this week and in the process has closed below 5900 on a weekly basis. Along with the short term trend, the medium term trend has also turned bearish. Only the long term trend remains upwards.

 


MARKET SLIDES ON RUPEE CONCERNS – 07/06/2013.

MEDIUM TERM TREND TURNS BEARISH.

The single biggest worry engulfing the market is the fast depreciating Rupee. Friday saw the Rupee crossing the 57 mark and is now nearing all time low levels. This does not spell good news for the market. Market continued with its fall this week and in the process has closed below 5900 on a weekly basis. Along with the short term trend, the medium term trend has also turned bearish. Only the long term trend remains upwards.

TECHNICALLY SPEAKING. 

Sensex opened the week at 19859, made a high of 19860, low of 19395 and closed the week at 19429. Thus it registered a weekly loss of 331 points. At the same time the Nifty opened the week at 5997, made a high of 6011, low of 5869 and closed the week at 5881. Thus the Nifty went down by just 104 points on a weekly basis.

After forming a Doji last week, both the indices continued with their fall and formed a bearish candle this week. Nifty has formed an Opening Black body Marubuzo while the Sensex has formed a big black body candle. On the daily charts both the indices have formed a small black body candle with a big upper shadow. The big upper shadow indicates selling pressure at higher levels. Thus both daily and weekly charts suggest bearishness to continue.

This week both the indices have closed below the medium term average of 50dma (Sensex – 19412 and Nifty – 5887). Already both Sensex and Nifty are well below the short term average of 20dma (Sensex – 19896 and Nifty – 6039). However, the market continues to remain above the long term average of 200dma (Sensex – 19088 and Nifty – 5790). Thus the trend in the short term and medium term timeframe has turned bearish, whereas the trend in the long term timeframe remains upwards.

Currently the market is in a correction mode and is correcting the rally from Sensex 18144 to 20443 and Nifty from 5477 to 6229. The respective Correction levels are Sensex 19565-19293-19022 and Nifty 5942-5853-5764. When the Sensex went below 19568 and Nifty below 5936, the correction resumed.

Nifty has a strong support at the Support zone between Nifty 5853-5843 which is due to the confluence of 50% Retracement level (5853), and Bullish Rising Gap (5853-5844). Thus it is a critical support level and is likely to be tested this week; if breached then the current bullish trend will reverse.

Both Sensex and Nifty has completed a bearish topping out pattern called Bearish Head and Shoulders. The targets according to this pattern fall at Sensex 19055 and Nifty 5728.

The Bullish Rising Gap between Sensex 18284-18062 and Nifty 5526-5447 was tested many times in the last couple of months and that gap has proved to be a strong support for the market. In fact this gap has consistently provided support to the market. This gap holds more significance because a breach of this gap will signal the end of the current rally.

MACD continues in Sell mode and has turned negative. ROC too is negative and continues with its Sell signal. RSI (41) continues in Sell mode suggesting the momentum is bearish. Stochastic Oscillator has given a fresh Buy signal as %K (9) has gone above %D. MFI continues to fall and is well below the equilibrium line at 27, suggesting money flowing out. ADX has further reduced to 22, suggesting the uptrend has almost all of its strength. The Directional Indicators have given a Sell signal this week as –DI has gone above +DI. OBV too has gone below previous bottom and has given a Sell signal. It has started making lower top lower bottom formation. Even though the prices are touching the lower Bollinger band, it has not yet given a Sell signal. Thus, majority of the Oscillators points towards continuation of bearishness in the short term.

The Nifty O.I. PCR has reduced to 1.05. For the June series, highest Open interest build has shifted from 5900 Put to 5800 Put and 6100 Call. This suggests that the market expects a trading range for the Nifty with support coming in at 5800 and resistance around 6100 levels. Lot of Put writing was seen at the strike of 5600 on Friday, which suggests next support to come in at that level.

For the week ahead, Sensex will find Support at 19149-18873-18599 and will find Resistance at 19754-20036-20254.

For the week ahead, Nifty will find Support at 5791-5718-5604 and will find Resistance at 5972-6057-6133.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5604

5718

5791

5881

5972

6057

6133

Sensex

18599

18873

19149

19429

19754

20036

20254

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Sell TataStL

292

282

290

1000

Rs. 2,000

Sell OBC

244

235

233

1000

Rs.11,000

Raymond

274

265

266

1000

Rs. 8,000

Sell REC

221

212

214

1000

Rs. 7,000

AdniEnt

212

204

204

1000

Rs. 8,000

Total

Rs.36,000

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell Bharti

288

293

280

272

Sell Siemens

576

589

557

537

Sell Idea

128

130

124

120

Sell SesaGoa

154

157

149

144

Sell NTPC

148

151

143

138

WATCH OUT FOR:

Idea

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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