Archives : ONLY ONE WAY, THE BULL WAY - 31/10/2014.

ONLY ONE WAY, THE BULL WAY - 31/10/2014.

BACK TO ROUTINE.

Bulls were simply unstoppable on Friday as the market went from strength to strength and closed the day with more than 500 points gain. Not only did the week close with a bang but also the month ended on a very strong footing. Both weekly and monthly charts have formed a big Closing White body Marubuzo which indicates strong bullishness in the near term. Market has swiftly resumed its upward journey after undergoing a Correction in the short term and is now back to routine of making frequent new highs.

 


ONLY ONE WAY, THE BULL WAY - 31/10/2014. 

BACK TO ROUTINE.

Bulls were simply unstoppable on Friday as the market went from strength to strength and closed the day with more than 500 points gain. Not only did the week close with a bang but also the month ended on a very strong footing. Both weekly and monthly charts have formed a big Closing White body Marubuzo which indicates strong bullishness in the near term. Market has swiftly resumed its upward journey after undergoing a Correction in the short term and is now back to routine of making frequent new highs.

TECHNICALLY SPEAKING.

Sensex opened the week at 26959, made a high of 27894, low of 26726 and closed the week at 27865. Thus it closed the week with a strong gain of 1014 points. At the same time the Nifty opened the week at 8064, made a high of 8330, low of 7985 and closed the week at 8322. Thus the Nifty closed the week with a gain of 308 points.

Both the indices have closed the week on a high and registered a big Closing White body Marubuzo. Even the monthly closing was at its top, thus forming a Closing White body Marubuzo on the monthly charts. On the daily charts, both Sensex and Nifty have formed Opening White body Marubuzo on two consecutive days i.e. Thursday and Friday. Thus both daily as well as weekly candlestick patterns suggest bullishness to continue in the near term.

Both the indices have left behind a Bullish Rising Gap between Sensex 27438-27390 and Nifty 8198-8181 on Friday. This gap will not only act as a support but it can also be interpreted as a Measuring Gap and the target as per Gap Theory falls at Sensex 28918 and Nifty 8656.

Both the indices have managed to close above the short term average of 20dma (Sensex – 26633 and Nifty – 7953) and even the medium term average of 50dma (Sensex – 26711 and Nifty – 7973). Besides, both the indices continue to remain well above the long term average of 200dma (Sensex – 24066 and Nifty – 7172). Thus the trend in the short and medium term has turned up while that in the long term remains bullish.

MACD and Price ROC are both positive and continue with their buy signals. RSI @ 70 is just turning overbought but still shows tremendous bullish momentum. Same is the case with Stochastic which is also overbought at a very high level of 98. MFI (64) continues its journey upwards suggesting positive money flow in the market. ADX has moved to 21 suggesting that the uptrend is gaining strength. Directional Indicators continue in buy mode as +DI remains above –DI. Bollinger Band has signaled a Buy on Wednesday when price closed above the upper band. Except for certain Oscillators which are overbought, majority of the Oscillators are suggesting bullishness to continue in the short term.

Option data for the November series, suggests highest Put Open Interest at the strike of 8000 and highest Call build-up at the strike of 8500. Thus Option data suggests a trading range with support coming in at 8000 and resistance around 8500. On Friday, 8200 Put has seen strong Open Interest buildup which suggests immediate support at the level of 8200.

Trendline Resistance for the Sensex falls at 28243.

Trendline Resistance for the Nifty is at 8456.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7972

8064

8198

8322

8430

8527

8637

Sensex

26615

26994

27438

27865

28174

28486

28798

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy LICHsg

332

357

364

1000

Rs.32,000

Buy Bhel

226

243

258

2000

Rs.64,000

UnionBank

217

233

233

2000

Rs.32,000

IndusInd

660

711

722

500

Rs.31,000

TVSMotor

229

245

263

1000

Rs.34,000

Total

Rs.1,93,000.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy DivisLab

1875

1838

1932

1991

Buy SBI

2702

2643

2793

2885

Buy M&M Fin

293

288

301

310

Buy IDFC

156

152

163

170

Buy JMFinance

47

45

51

56

WATCH OUT FOR:

JMFinance

M&MFin

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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