Archives : FIRST SIGN OF PROFIT BOOKING - 30/05/2014.

FIRST SIGN OF PROFIT BOOKING –  30/05/2014.

EXPIRY DAY JITTERS.

It was expiry jitters at work on Thursday, as the Nifty ended the expiry day with a loss of 100 points and Sensex around 300 points. It was a result of profit booking in broader market which continued on Friday as well. Rollover in the Nifty was on the higher side at around 59.9% whereas the Bank Nifty is on the lower side at 52%. Sector wise strong Rollovers were seen in Power, Metal and Capital Goods. Among the stocks, strong Rollovers were witnessed in GMR Infra, Titan, OFSS, Hindalco and Titan.

 

 


FIRST SIGN OF PROFIT BOOKING –  30/05/2014.

EXPIRY DAY JITTERS.

It was expiry jitters at work on Thursday, as the Nifty ended the expiry day with a loss of 100 points and Sensex around 300 points. It was a result of profit booking in broader market which continued on Friday as well. Rollover in the Nifty was on the higher side at around 59.9% whereas the Bank Nifty is on the lower side at 52%. Sector wise strong Rollovers were seen in Power, Metal and Capital Goods. Among the stocks, strong Rollovers were witnessed in GMR Infra, Titan, OFSS, Hindalco and Titan.

TECHNICALLY SPEAKING.

Sensex opened the week at 24913, made a high of 25175, low of 24163 and closed the week at 24217. Thus it closed the week with a loss of 476 points. At the same time the Nifty opened the week at 7428, made a high of 7504, low of 7118 and closed the week at 7229. Thus the Nifty closed the week with a loss of 138 points.

Both Sensex and Nifty have completed a black body candle on the weekly chart. In conjunction with the previous weeks candle, a Bearish Engulfing has been completed which is a bearish reversal pattern. Only point to note here is that both the candles are within the upper shadow of the candle formed three weeks back. On the daily charts, both the indices have formed a small black body candle in line with the downtrend. Thus daily and weekly candlestick analysis suggests a bearish bias in the near term.

Last ten days, the market has spent consolidating inside the Election Day candle (Sensex 23873-25375 and Nifty 7130-7563) and hence according to Candlestick analysis, these can be termed as Rest days, lacking major directional movement. The low formed at Sensex 23873 and Nifty 7130 assume the role of an intermediate support. Only a breach of this support will lead the market to test the strong Support Zone created by the Bullish Rising Gap between Sensex 23729-23537 and Nifty 7067-7020.

Both the indices have completed a Bullish Flag pattern on daily aw well as weekly charts. Thus as per Flag pattern on daily as well as weekly charts, one can expect a target of 25859-25915 for the Sensex and 7705-7706 for the Nifty.

Market has left behind a Bullish Rising Gap between Sensex 23729-23572 and Nifty 7067-7020, which will act as strong support. However a stronger support zone exists between Sensex 22256-22197 and Nifty 6665-6650 which has been tested successfully many times before, without getting breached and hence the current uptrend will reverse only if this support zone gets breached.

When the market overcame the previous top and made fresh lifetime highs, it marked the end of six year consolidation. On the weekly charts both Sensex and Nifty have completed a Bullish Saucer formation and the targets as per that will fall at Sensex 27081 and Nifty 8145. 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 long term bullish rally.

Both Sensex and Nifty are way above the short term average of 20dma (Sensex – 23813 and Nifty – 7102), the medium term average of 50dma (Sensex – 22939 and Nifty – 6853) and the long term average of 200dma (Sensex – 21035 and Nifty – 6255). Thus the trend in the short term, medium term and the long term timeframe continues to remain bullish.

MACD has given a fresh Sell despite being positive while ROC still continues with its Buy signal by remaining above the equilibrium line. RSI (63) has come down from overbought levels and is now suggesting bullish momentum. MFI (60) has reduced slightly suggesting positive money flow for the market. Stochastic Oscillator %K is in Sell mode as it has gone below %D. ADX has increased sharply to 50, suggesting that the Uptrend is now very strong and mature. The Directional Indicators continue with their Buy signal as +DI is well above -DI. OBV has started moving lower and is now making lower top lower bottom formation. Buy signal continues on Bollinger Band for the third week. Thus Oscillators are suggesting a mixed bias in the near term. 

Nifty Options data suggest high Put writing at the strike of 7000 and strong Call writing at the strike of 7500. Thus one can expect a range of the market between Nifty 7000 and 7500.

For the week ahead, Sensex will find Support at 23873-23572-23236 and will find Resistance at 24587-24913-25375.

For the week ahead, Nifty will find Support at 7130-7020-6940 and will find Resistance at 7353-7454-7563.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

6940

7020

7130

7229

7353

7454

7563

Sensex

23236

23572

23873

24217

24587

24913

25375

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Siemens

962

997

990

500

Rs.14,000

JindalStl

300

313

319

1000

Rs.19,000

HindZinc

161

168

166

2000

Rs.10,000

JsWHold

828

888

877

500

Rs.24,500

UCO

111

116

115

4000

Rs.16,000

Total

Rs.83,500

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy TechMah

1923

1873

1999

2077

Buy AuroPharma

669

646

704

741

Buy Mphasis

440

425

466

493

Buy PVR

582

565

610

640

Buy EssarOil

91

88

97

104

WATCH OUT FOR:

Tech Mahindra
.
Mphasis

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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