Archives : SENSEX CLOSES ABOVE 27000, NIFTY ABOVE 8100 - 12/09/2014.

SENSEX CLOSES ABOVE 27000, NIFTY ABOVE 8100 – 12/09/2014.

RALLY SPREADS TO MID & SMALL CAPS .

The market is showing amazing resilience as the bulls continue to bravely defend the level of 8000 on the Nifty. One of the problems with the current rally was that it seemed limited only to frontline index stocks, while the mid-cap and small-cap stocks were seen lagging behind. The scenario has changed in the past two weeks, as the current rally is now getting broad based. This week the frontline indices closed almost flat whereas the mid-cap and small-cap indices went up by nearly 3%.

 

 


SENSEX CLOSES ABOVE 27000, NIFTY ABOVE 8100 – 12/09/2014.

RALLY SPREADS TO MID & SMALL CAPS .

The market is showing amazing resilience as the bulls continue to bravely defend the level of 8000 on the Nifty. One of the problems with the current rally was that it seemed limited only to frontline index stocks, while the mid-cap and small-cap stocks were seen lagging behind. The scenario has changed in the past two weeks, as the current rally is now getting broad based. This week the frontline indices closed almost flat whereas the mid-cap and small-cap indices went up by nearly 3%.

TECHNICALLY SPEAKING.

Sensex opened the week at 27145, made a high of 27354, low of 26904 and closed the week at 27061. Thus it closed the week with a gain of 35 points. At the same time the Nifty opened the week at 8132, made a high of 8180, low of 8057 and closed the week at 8105. Thus the Nifty closed the week with a gain of 19 points.

Weekly chart has seen a small Black body Spinning Top which is a neutral formation. In this case it indicates uncertainty regarding the continuation of weekly Uptrend. A black body candle next week will confirm bearishness on the weekly timeframe. On the daily charts, a small white body formation has occurred on Friday. It could have been a Bullish Harami if it had formed in a downtrend, which is not the case here.

The market registered a weekly gap last week between Sensex 26732-26674 and Nifty 7984-7968. This gap will not only act as a strong support but it is also a Measuring gap. Thus, according to Gap theory, the immediate target for the current rally falls at Sensex 28174 and Nifty 8412. A weekly close below Sensex 26674 and Nifty 7968 will reverse the short term trend.

The market is constantly making higher top higher bottom formations and the medium term trend is likely to reverse if the Nifty closes below 7540 and Sensex below 25232. A breach of this support is likely to test the Support zone between Sensex 24979-24878 and Nifty 7441-7394 which is due to a confluence of the 61.8% correction level with intermittent bottoms at Sensex 24892 & 24878 and Nifty 7441 & 7422.

The market has already achieved the Rounding bottom target of Sensex 27081 and Nifty 8145. Now it is headed towards next target which is Flag pattern target, which got completed when the Sensex closed above 26530 and Nifty above 7922. The target for this pattern is at Sensex 27828 and Nifty 8304. The targets will be achieved as long as the Sensex remains above 26262 and Nifty above 7855.

On a higher scale, a very strong Support zone is formed between Sensex 23879-23729 and Nifty 7112-7067. This is a result of confluence of 38.2% Retracement of the higher rally (Sensex – 23879 and Nifty 7112), 61.8% Retracement of the immediate rally (Sensex – 23813 and Nifty 7097) and the start of the intermediate Bullish Rising Gap (Sensex 23729 and Nifty 7067). The long term trend will continue to remain bullish as long as this Support zone is held.

This week, both Sensex and Nifty have managed to remain above the short term average of 20dma (Sensex – 26746 and Nifty 7998) as well as the medium term average of 50dma (Sensex – 26126 and Nifty – 7804). Both the indices continue to remain well above the long term average of 200dma (Sensex – 23197 and Nifty – 6919). Thus the trend in the short term, medium term and long term continues to remain bullish.

MACD has converged but is yet to give a Sell signal whereas the Price ROC is positive and hence continues with its buy signal. RSI is strong at 63, suggesting bullish momentum. ADX has increased further to 35 indicating that the uptrend is getting stronger. Directional Indicators continue in Buy mode as +DI is above –DI. OBV has moved lower but is yet to give a Sell signal. MFI has reduced to 54 but still suggests positive money flow in the market. Thus Oscillators are suggesting a bullish bias in the near term.

Option data suggests that highest Put Open Interest build-up is at the strike of 8000 and highest Call build-up is at the strike of 8300. Thus Option data analysis indicates a short term trading range with support coming in at 8000 and resistance around 8300. Friday saw heavy Put writing at the strike of 8100 which indicates that the Nifty will find support at the level of 8100.

Strong Trendline Support for the Sensex is at 26581. Trendline Resistance for the Sensex is at 27478.

Strong Trendline Support for the Nifty is at 7920. Trendline Resistance for the Nifty is at 8192.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7752

7862

7984

8105

8180

8304

8412

Sensex

25928

26300

26732

27061

27354

27828

28174

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy Wipro

581

601

595

500

Rs. 7,000

Buy IRB

266

276

274

4000

Rs.32,000

HindZinc

171

177

178

2000

Rs.14,000

Buy OIL

644

667

670

500

Rs.13,000

Buy NBCC

488

509

546

500

Rs. 29,000

Total

Rs. 95,000.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy OBC

286

280

296

307

Buy NMDC

176

172

183

191

Buy UnionBnk

214

207

225

237

Buy Wockhardt

851

817

905

965

Buy Praj

67

65

71

76

WATCH OUT FOR:

OBC

Wockhardt

Chennai Petro

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.

Copyright © 2000 - 2018 Jatin Sanghavi. All rights reserved.
No part of the material on this website may be reproduced or distributed in any forms or by any means, electronics or mechanical without the written permission of the author.
Sitemap