Archives : BULLS MISSING IN ACTION - 14/11/2013.

BULLS MISSING IN ACTION – 14/11/2013.

UPTREND WILL RESUME ABOVE NIFTY 6201.

Bulls seems to have taken off for a holiday after taking Sensex to all time high levels on Muhurat Trading day. However, Nifty just about missed breaching the all time high levels. Both the indices have retraced after testing the peaks. After eight consecutive days of fall, market has managed to bounce back on the last day of this week. But the bounce back was interrupted due to the high inflation figure released during the day and as a result the Nifty almost gave away around 50 points from the day’s high level. We are witnessing a minor pull-back as long as the recent low of Sensex 20161 and Nifty 5972 holds. Strong Uptrend will resume only when Nifty closes above 6201.


BULLS MISSING IN ACTION – 14/11/2013.

UPTREND WILL RESUME ABOVE NIFTY 6201.

Bulls seems to have taken off for a holiday after taking Sensex to all time high levels on Muhurat Trading day. However, Nifty just about missed breaching the all time high levels. Both the indices have retraced after testing the peaks. After eight consecutive days of fall, market has managed to bounce back on the last day of this week. But the bounce back was interrupted due to the high inflation figure released during the day and as a result the Nifty almost gave away around 50 points from the day’s high level. We are witnessing a minor pull-back as long as the recent low of Sensex 20161 and Nifty 5972 holds. Strong Uptrend will resume only when Nifty closes above 6201.

TECHNICALLY SPEAKING.

Sensex opened the week at 20596, made a high of 20672, low of 20161 and closed the week at 20399. Thus it registered a weekly loss of 267 points. At the same time the Nifty opened the week at 6110, made a high of 6141, low of 5972 and closed the week at 6056. Thus the Nifty closed the week with a loss of 84 points.

On the daily charts, both Sensex and Nifty have formed a small white body with a long upper shadow and no lower shadow, similar to the Shooting Star. But Shooting Stat occurs at the top of an uptrend which is not the case here. The long upper shadow indicates Selling pressure at higher levels. On the weekly charts both the indices have formed a black body candle with slightly longer lower shadow and a smaller upper shadow. Thus both daily as well as weekly charts suggest a bearish bias in the near term.

Both Sensex and Nifty have corrected right from the Muhurat Trading day. Indices have only managed to bounce back on the last day of this week, but not before registering eight consecutive black body candles. Currently we are in a pull-back and the pull-back levels are Sensex 20604-20741-20878 and Nifty 6113-6157-6201. This pull-back will last as long as the market does not breach the recent low of Sensex 20161 and Nifty 5972. The prior uptrend will resume only if Sensex closes above 20878 and Nifty above 6201.

The current bullish rally faced stiff resistance in the form of a long term Supply line which is falling at Sensex 21001 and Nifty 6318. Even though Sensex and Nifty managed to breach this resistance for a short while, they failed to sustain above this level. As a result the key to higher levels lies in breaching this strong Supply line.

The current rally started from the low of Sensex 19264 and Nifty 5700. This was from the strong Support Zone formed due to the Bullish Rising Gap between Sensex 19293 – 19444 and Nifty 5688-5738. This is a critical gap and 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). Then as per Gap theory, the target for the upward rally works out to be Sensex 21289 and Nifty 6308. This target was achieved on the Muhurat Trading day when Sensex registered a high of 21321 and Nifty 6342.

This week, both Sensex and Nifty closed below the short term average of 20dma (Sensex – 20783 and Nifty – 6176), tested the medium term average of 50dma (Sensex – 20223 and Nifty – 5994) but have remained above the long term average of 200dma (Sensex – 19537 and Nifty – 5862). Thus the trend in the short term has turned down, but the trend in the medium term and long term timeframe remains positive.

MACD and ROC continue with its Sell signal. RSI (46) suggests bearish momentum. MFI (41) continues in Sell mode, suggesting money flowing out. Stochastic Oscillator has given a fresh Buy signal as %K (9) has gone above %D. ADX has fallen to 20, suggesting that the current trend is not strong. The Directional Indicators continue with its Sell signal as +DI remains below -DI. OBV has fallen lower and continues in Sell mode. This week both Sensex and Nifty gave a Sell signal when the prices closed below the lower Bollinger band. Oscillators suggest a bearish bias in the short term.

The Nifty O.I. PCR has reduced to 0.98. For the current month series, highest Open interest build up is at 6300 Call and 6000 Put. This suggests that the market expects a trading range with support coming in at 6000 levels and resistance around 6300 levels.

The Trendline Resistance for the Sensex is at 21001. Trendline Support is at 20231.

The Trendline Resistance for the Nifty is at 6318. Trendline Support is at 5993.

For the week ahead, Sensex will find Support at 20052-19647-19264 and will find Resistance at 20739-21039-21321.

For the week ahead, Nifty will find Support at 5972-5877-5786 and will find Resistance at 6142-6252-6342.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5786

5877

5972

6056

6142

6252

6342

Sensex

19264

19647

20052

20399

20739

21039

21321

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy NTPC

152

149

158

165

Buy REC

216

211

224

233

Buy Bata

981

967

1003

1027

Buy TataChem

276

271

285

295

Buy IBReal

68

66

72

76

WATCH OUT FOR:

NTPC

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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