Archives : DECEMBER BULLS ON RAMPAGE - 28/11/2014.

 ‘DECEMBER’ BULLS ON RAMPAGE - 28/11/2014.

POSITIVE START TO DECEMBER SERIES.

The December series has started on a very strong note as the Sensex jumped by more than 250 points and Nifty around 100 on Friday itself. In the process, the Nifty not only breached the resistance offered by the Rising Trendline but also managed to close above that. Nifty is on its way to test the short term target of 8656 and then proceed towards the intermediate rally target of 8893. Traditionally, the December month has always favoured the Bulls and this time the series has started on a very strong footing and hence one can expect more fireworks coming from the Bulls in this series.

 

 


 ‘DECEMBER’ BULLS ON RAMPAGE - 28/11/2014.

POSITIVE START TO DECEMBER SERIES.

The December series has started on a very strong note as the Sensex jumped by more than 250 points and Nifty around 100 on Friday itself. In the process, the Nifty not only breached the resistance offered by the Rising Trendline but also managed to close above that. Nifty is on its way to test the short term target of 8656 and then proceed towards the intermediate rally target of 8893. Traditionally, the December month has always favoured the Bulls and this time the series has started on a very strong footing and hence one can expect more fireworks coming from the Bulls in this series.

TECHNICALLY SPEAKING.

Sensex opened the week at 28413, made a high of 28822, low of 28217 and closed the week at 28693. Thus it closed the week with a gain of 359 points. At the same time the Nifty opened the week at 8490, made a high of 8617, low of 8429 and closed the week at 8588. Thus the Nifty closed the week with a gain of 111 points.

After testing the rising Trendline with indecisive candles for first four days of the week, both the indices formed a big Opening White body Marubuzo on Friday which helped achieve the breakout by closing above that Trendline. On the weekly chart, both Sensex and Nifty have formed a real white body candle. This is second successive real body candle in last two weeks which points towards more upside in the near term. Thus both daily and weekly candles suggest continuation of bullishness.

As mentioned in the last week’s article, a decisive breakout above the rising Trendline is likely to propel both the indices to much higher levels. Thus one can expect both Sensex and Nifty to move towards an immediate target of 28918 and 8656 respectively, which is as per Gap theory. Above which one can expect both the indices to move towards intermediate rally target (golden ratio) which is at Sensex 29554 and Nifty 8893.

Both the indices continue to remain above the short term average of 20dma (Sensex – 28088 and Nifty – 8399), medium term average of 50dma (Sensex – 27225 and Nifty – 8140) and even above the long term average of 200dma (Sensex – 24711 and Nifty – 7380). Thus the trend in the short term, medium term and the long term timeframe remains bullish.

MACD and Price ROC are both positive and continue with their buy signals. RSI @ 74 and Stochastic oscillator %K (83) continue to remain overbought since last one month. However MFI (70) suggests positive money flow in the market but continues to play with the overbought zone. ADX has further increased to 33, which indicates that the uptrend is getting stronger. Direction Indicators continue in buy mode as +DI remains above –DI. Bollinger Band continues in Buy mode. Except for certain Oscillators which are overbought, majority of the Oscillators are suggesting bullishness in the short term. 

Option data for the December series, shows highest Put Open Interest continues at the strike of 8500 and highest Call build-up has shifted higher to the strike of 8600. Thus Option data suggests a very narrow trading range with support coming in at 8500 and resistance around 8600. On Friday, 8800 Call has seen strong Open Interest buildup which suggests that the market might find next resistance at the level of 8800.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8320

8415

8506

8588

8656

8771

8893

Sensex

27739

28027

28360

28693

28918

29294

29554

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy SBI

305

317

322

1250

Rs.21,250

Buy BoB

1038

1097

1099

250

Rs.15,250

TataCoffee

962

995

1030

250

Rs.17,000

Eveready

169

186

193

2000

Rs.48,000

Buy STC(I)

207

220

209

1000

Rs. 2,000

Total

Rs.1,03,500.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy HeroMoto

3147

3089

3238

3333

Buy BoB

1087

1059

1135

1184

Buy AKZOIndia

1332

1306

1375

1420

Buy OBC

305

296

320

336

Buy ShasunPh

245

236

258

272

WATCH OUT FOR:

AKZOIndia

PNB

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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