Archives : BULLS HIT BACK, SENSEX RECLAIMS 29000 - 13/02/2015.

BULLS HIT BACK, SENSEX RECLAIMS 29000 - 13/02/2015. 

50 DMA TO THE RESCUE.

As soon as the Delhi Election results were out, the market took a U-Turn and bounced back to the surprise of many. But the followers of the Classical Theory were well aware that it was the principle “Price Discounts Everything” at play. Market in its wisdom, had already discounted the news of AAP sweeping the Delhi polls and hence the strong rebound. This time the medium term average of 50dma came to the rescue of the market as the market saw a sharp recovery in the past four days and as a result the Sensex reclaimed 29000 and Nifty 8800. It was very clearly highlighted that the Bull market corrections tend to be sharp, severe and short lived but they tend to provide good buying opportunity and this time was no different.

 

 


BULLS HIT BACK, SENSEX RECLAIMS 29000 - 13/02/2015. 

50 DMA TO THE RESCUE.

As soon as the Delhi Election results were out, the market took a U-Turn and bounced back to the surprise of many. But the followers of the Classical Theory were well aware that it was the principle “Price Discounts Everything” at play. Market in its wisdom, had already discounted the news of AAP sweeping the Delhi polls and hence the strong rebound. This time the medium term average of 50dma came to the rescue of the market as the market saw a sharp recovery in the past four days and as a result the Sensex reclaimed 29000 and Nifty 8800. It was very clearly highlighted that the Bull market corrections tend to be sharp, severe and short lived but they tend to provide good buying opportunity and this time was no different.

TECHNICALLY SPEAKING.

Sensex opened the week at 28566, made a high of 29154, low of 28044 and closed the week at 29094. Thus it closed the week with a gain of 377 points. At the same time the Nifty opened the week at 8584, made a high of 8822, low of 8470 and closed the week at 8805. Thus the Nifty closed the week with a gain of 144 points.

On the daily charts, Nifty completed a Piercing Line formation on Tuesday which is a bullish reversal pattern. Thereafter both the indices have formed white body candles as a follow up to the Piercing Line pattern. On the weekly charts too, both the indices have formed a Bullish Piercing Line. Thus daily as well as weekly candlestick patterns point towards bullishness in the near term.

On the monthly chart, both the indices have formed a Last Engulfing Top which is a bearish pattern. It requires a confirmation in the form of a black body candle in the next month. But if the February month candle closes above the high of this pattern i.e. above Sensex 29844 and Nifty 8996 then the above pattern will stand negated.

Both the indices bounced back from their medium term average of 50dma (Sensex – 28064 and Nifty – 8459) and in this process also reclaimed the short term average of 20dma (Sensex – 28896 and Nifty – 8727). Besides both Sensex and Nifty continue to remain well above the long term average of 200dma (Sensex – 26459 and Nifty – 7925). Thus the trend in the short term has once again turned bullish, whereas the trend in the medium term and long term timeframe continues to remain up.

If the Sensex continues to remain above 29156 and Nifty 8795, then the Sensex will head towards its life high level of 29844 and Nifty towards 8996.

MACD and Price ROC continue with their Sell signals. RSI (61) has gone above the equilibrium line and hence suggests bullish momentum. MFI has dropped to 55 but is still above the centerline which indicates positive money flow. Stochastic Oscillator %K (46) is above %D and hence continues in Buy mode. ADX has dropped to 24 suggests that the trend is consolidating. Directional Indicators continue in Buy mode as +DI remains above –DI. OBV continues in Buy signal and has started making higher top higher bottom formations. Buy signal in Bollinger Band got negated when Nifty closed below the mean on Monday. Thus Oscillators are painting a mixed picture. 

Option data suggest highest Call Open Interest buildup at the strike of 9000, whereas the highest Put build-up is seen at the strike of 8600. Thus Option data suggests a trading range with support coming in at 8600 and resistance around 9000. Friday saw strong build-up for 8800 Put which indicates that the level of 8800 might act as immediate support.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8470

8574

8689

8805

8893

8996

9100

Sensex

28044

28406

28822

29094

29554

29844

30076

LAST WEEKS RECOMMENDATIONS:

PAIR NO.

STOCK

Recomm@

Target

Reached

1

Buy

TCS

2575

2626

2575

Sell

Dr.Reddy

3044

2928

3007

2

Buy

JubilantFood

1475

1595

1641

Sell

StridesArc

866

835

821

3

Buy

ITC

373

380

379

Sell

Havells

244

234

240

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy OFSS

3443

3380

3545

3649

Buy STFC

1260

1235

1299

1339

Buy Wipro

660

649

679

699

Buy Glenmark

766

753

789

813

Buy TVSMotor

307

300

319

332

WATCH OUT FOR:

STFC

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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