Archives : INFOSYS LEADS THE MARKET HIGHER - 11/10/2013.

INFOSYS LEADS THE MARKET HIGHER – 11/10/2013.

TECH STOCKS LEAD.

This week the Nifty bounced back (from a low of 5825) after testing the long term support of 200dma (5843). The bullish momentum was further boosted by the strong Q2 performance by IT major Infosys. Infosys was up by 5% on Friday and it led the IT index higher by around 3%. Infosys declared a healthy set of results with dollar revenues significantly ahead of expectations.

 

 


INFOSYS LEADS THE MARKET HIGHER – 11/10/2013.

TECH STOCKS LEAD.

This week the Nifty bounced back (from a low of 5825) after testing the long term support of 200dma (5843). The bullish momentum was further boosted by the strong Q2 performance by IT major Infosys. Infosys was up by 5% on Friday and it led the IT index higher by around 3%. Infosys declared a healthy set of results with dollar revenues significantly ahead of expectations.

TECHNICALLY SPEAKING.

Sensex opened the week at 19880, made a high of 20559, low of 19647 and closed the week at 20528. Thus it registered a weekly gain of 613 points. At the same time the Nifty opened the week at 5889, made a high of 6107, low of 5825 and closed the week at 6096. Thus the Nifty closed the week with a gain of 189 points.

After forming a Bullish Piercing Line formation in the previous week, this week saw both the indices registering a big white body candle in line with the uptrend. On the daily charts, Nifty has formed a Bearish Reversal pattern called the Hanging Man. It has a small black body with a lower shadow. This pattern requires a confirmation in the form a black body candle on Monday. On the other hand, Sensex has formed a Doji formation with a long lower shadow and very small upper shadow. This is a neutral formation, but it can have bearish implications if a bearish candle is formed on Monday. Thus weekly charts look positive, whereas the immediate short term trend suggests a neutral to slightly bearish outlook.

A Bullish Island Reversal was completed last week. The Bullish Island Reversal will fail only when Sensex goes below 19264 and Nifty 5700.

Last week both the indices tested the strong Support Zone formed by the confluence of the Bullish Rising Gap between Sensex 19293 – 19444 and Nifty 5688-5738 along with presence of 200dma for the Sensex (19424) and 50dma for the Nifty (5704) inside this gap. The market had bounced back from Sensex low of 19264 and Nifty 5700. Thus this gap holds great significance as a breach of this gap will end the current uptrend.

The above mentioned Gap is also a Measuring Gap (Sensex 19293 – 19444 and Nifty 5688-5738) in the current upward rally (the rally which started from a low of Sensex 17448 and Nifty 5118). If this gap continues to hold, then as per Gap theory, the target for the upward rally works out to be Sensex 21289 and Nifty 6308.

This week again, Nifty bounced back after taking support at the 200dma. Both the indices have managed to close above the long term average of 200dma (Sensex – 19424 and Nifty – 5843), medium term average of 50dma (Sensex – 19286 and Nifty – 5704) and the short term average of 20dma (Sensex – 19954 and Nifty – 5911). Thus the trend in the short term, medium term and long term timeframe remains positive.

MACD and ROC both continue with Buy signal given this week. RSI (64) has moved higher suggesting increase in bullish momentum. MFI (54) has given a fresh Buy signal on Friday, suggesting money flowing in the market. Stochastic Oscillator continues with its Buy signal (%K is above %D). ADX has decreased and is at 17 suggesting that the market trend is sideways. The Directional Indicators continue with its Buy signal as +DI remains above -DI. OBV has gone above the previous top, suggesting bullishness. Both Sensex and Nifty touched the upper Bollinger band on Friday, but could not manage to close above that, hence no signal. Oscillators suggest a bullish bias in the short term.

The Nifty O.I. PCR is steady at 1.30. For the current month series, highest Open interest build up is at 5700 Put and 6300 Call. This suggests that the market expects a trading range with support coming in at 5700 levels and resistance around 6300 levels. Friday saw high amount of Put writing at 5900 strike which indicates strong support at that level, in the short term.

The Trendline Resistance for the Sensex is at 20767. The Trendline Support for the Sensex is at 19891.

The Trendline Resistance for the Nifty is at 6211. Trendline Support for the Nifty falls at 5910.

For the week ahead, Sensex will find Support at 20254-19936-19647 and will find Resistance at 20854-21108-21362.

For the week ahead, Nifty will find Support at 6004-5917-5825 and will find Resistance at 6181-6284-6357.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5825

5917

6004

6096

6181

6284

6357

Sensex

19647

19936

20254

20528

20854

21108

21362

LAST WEEKS RECOMMENDATIONS:

All the Recommendations of previous week reached their targets with the exception of United Phosphorus. However the Star Performer of the week was Lupin which went up by more than 7%!!!

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy OFSS

3119

3198

3278

125

Rs.19,875

Buy Lupin

878

916

945

500

Rs.33,500

Ultracem

1910

1972

2000

125

Rs.11,250

DivisLab

1022

1053

1064

250

Rs.10,500

UniPhos

153

158

156

2000

Rs. 6,000

Total

Rs.81,125

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy L&T

882

863

910

939

Buy FedBnk

326

318

338

351

Buy BoB

562

548

583

606

Buy TataMtrDvr

193

189

200

207

Buy AdaniPort

150

147

155

160

WATCH OUT FOR:

Federal 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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