Archives : MARKET @ LIFE HIGHS - 07/03/2014.

MARKET @ LIFE HIGHS –  07/03/2014.

BULLS ON RAMPAGE.

This week belonged to the Bulls as the Bulls completely overpowered the Bears and led the market to fresh life time highs. The market was so strong that it simply discounted the Ukraine crisis and convincingly crossed the previous top. With the election dates being announced, the market seems to have started with the pre-election rally. The strength of the current rally shows that the market is expecting strong performance by the Modi led alliance and expecting it to get the majority in the current election. Nifty seems headed towards an intermediate target of 6897 with strong resistance expected at around 6700.

 

 


MARKET @ LIFE HIGHS –  07/03/2014.

BULLS ON RAMPAGE.

This week belonged to the Bulls as the Bulls completely overpowered the Bears and led the market to fresh life time highs. The market was so strong that it simply discounted the Ukraine crisis and convincingly crossed the previous top. With the election dates being announced, the market seems to have started with the pre-election rally. The strength of the current rally shows that the market is expecting strong performance by the Modi led alliance and expecting it to get the majority in the current election. Nifty seems headed towards an intermediate target of 6897 with strong resistance expected at around 6700.

TECHNICALLY SPEAKING.

Sensex opened the week at 21079, made a high of 21960, low of 20920 and closed the week at 21919. Thus it registered a strong weekly gain of 799 points. At the same time the Nifty opened the week at 6264, made a high of 6537, low of 6212 and closed the week at 6526. Thus the Nifty closed the week with a gain of 250 points.

On the daily charts, both Sensex and Nifty have formed a big Opening White body Marubuzo which suggests continuation of bullishness in the short term. The weekly charts have formed a big white body candle for the third week running, leading to formation of Three White Soldiers. Thus daily and weekly candlestick study suggests of bullishness to continue.

On Friday, the market opened with a gap up and proceeded to close higher, thus leaving behind a Bullish upward gap (Sensex 21539-21525 and Nifty 6413-6403). This Bullish Gap will act as a strong support going forward. Also the Bullish Gap mentioned above is also a Measuring Gap and as per Gap theory the target falls at Sensex 23101 and Nifty 6886.

When the indices closed above the previous top, both the indices completed a Bullish pattern in the intermediate term and the targets as per that falls at Sensex 23003 and Nifty 6897.

Thus as per Gap theory and Pattern analysis, Sensex seems headed towards a target of 23003-23101 and Nifty 6886-6897 in the intermediate term.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        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But there is a strong confluence zone between Sensex 22294-22302 and Nifty 6695-6712 which is likely to act as strong Resistance Zone in the near term.

As expected the market overcame the previous top and made fresh lifetime highs, thus paving the way for a very strong Upmove. One needs to understand that this marks the end of six year consolidation and hence upward targets also will be high. On the weekly charts both Sensex and Nifty have completed a Bullish Saucer formation and the targets as per that will fall at Sensex 24799 and Nifty 7454 on the lower side and Sensex 27081 and Nifty 8145 on the higher side. The targets are likely to be achieved over a period of next 20 months.

Current rally has started from a low of Sensex 19963 and Nifty 5933. Hence it becomes imperative that this support level holds so that the indices can move towards higher targets. Thus a breach of Sensex 19963 and Nifty 5933 will derail the current bullish rally.

This week, both Sensex and Nifty managed to remain above the short term average of 20dma (Sensex – 20788 and Nifty – 6179), the medium term average of 50dma (Sensex – 20839 and Nifty – 6193) and the long term average of 200dma (Sensex – 20115 and Nifty – 5992). Thus the trend in the short term, the medium term and the long term timeframe remains bullish.

MACD and ROC are both positive and continue with its Buy signal. RSI (74) suggests strong bullish momentum. MFI (83) has moved higher into the overbought zone. Stochastic Oscillator continues in Buy mode as %K (98) remains above %D. Thus RSI, MFI and Stochastic Oscillator are all overbought which suggests that the market may witness some profit booking in the near term. ADX (23) has increased, suggesting that the uptrend is now progressing. The Directional Indicators are in a Buy mode as +DI continues to remain above -DI. OBV continues in Buy mode making higher top higher bottom formation. Both the indices continue with Buy signal on Bollinger Band. Thus Oscillators suggests bullish bias in the near term.

The Nifty O.I. PCR has increased to a level of 1.50 which suggests the bullish mood prevailing in the market. For the March series, highest Open interest build up has shifted to 6200 Put and 6600 Call. This suggests that the market expects a wide trading range with support coming in at 6200 levels and resistance around 6600 levels. Friday saw strong put writing at the strike of 6500 level, which is likely to act as a strong immediate support.

The Trendline Resistance for the Sensex is at 22202. The Trendline Support for the Sensex is at 21337.

The Trendline Resistance for the Nifty is at 6678. The Trendline Support for the Nifty falls at 6347.

For the week ahead, Sensex will find Support at 21539-21282-20920 and will find Resistance at 22214-22537-22855.

For the week ahead, Nifty will find Support at 6415-6300-6212 and will find Resistance at 6615-6712-6803.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

6212

6300

6415

6526

6615

6712

6803

Sensex

20920

21282

21539

21919

22214

22537

22855

LAST WEEKS RECOMMENDATIONS:

It was a Super week as all the Recommendations given in the previous week did well and reached their targets with ease. But the Star performers of the week were Adani Enterprise and Crompton Greaves which went up by around 22% and 15% respectively!!! 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

UltraTech

1839

1920

1998

125

Rs.19,875

BajAuto

1946

1984

2005

125

Rs. 7,375

AdaniEnt

254

270

309

1000

Rs.55,000

Buy Crompton

128

137

147

2000

Rs.38,000

Buy ViPInd

72

76

77

4000

Rs.20,000

Total

Rs.1,40,250

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy CenTex

340

333

352

365

Buy JindalStL

257

252

265

274

Buy LiCHsg

223

218

230

238

Buy Bhel

184

180

190

197

Buy PFC

173

170

179

185

WATCH OUT FOR:

PFC

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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