Archives : RATE CUT AFTER BUDGET, MARKET NOT IMPRESSED - 05/03/2015.

RATE CUT AFTER BUDGET; MARKET NOT IMPRESSED - 05/03/2015.

SURPRISE RATE CUT.

.

Both Sensex and Nifty failed to cross their previous life highs after the presentation of the Union Budget. The market was particularly unimpressed by the Fiscal Deficit target of 3.9 for the next fiscal. Even before the market could digest the Budget, there was another surprise in store as the RBI cut the Interest rate by 25bps. This definitely helped the market cross the life highs of Sensex (29844) and Nifty (8996) but could not close above that level, which indicated that the news had already been discounted. As the sudden surprises come to an end, it indicates that the market is now finding it difficult to sustain at the top. Hence some consolidation can be expected in the near term.

 

 


RATE CUT AFTER BUDGET; MARKET NOT IMPRESSED - 05/03/2015.

SURPRISE RATE CUT.

.

Both Sensex and Nifty failed to cross their previous life highs after the presentation of the Union Budget. The market was particularly unimpressed by the Fiscal Deficit target of 3.9 for the next fiscal. Even before the market could digest the Budget, there was another surprise in store as the RBI cut the Interest rate by 25bps. This definitely helped the market cross the life highs of Sensex (29844) and Nifty (8996) but could not close above that level, which indicated that the news had already been discounted. As the sudden surprises come to an end, it indicates that the market is now finding it difficult to sustain at the top. Hence some consolidation can be expected in the near term.

TECHNICALLY SPEAKING.

Sensex opened the week at 29533, made a high of 30024, low of 29162 and closed the week at 29448. Thus it closed the week with a gain of 87 points. At the same time the Nifty opened the week at 8953, made a high of 9119, low of 8849 and closed the week at 8937. Thus the Nifty closed the week with a gain of 36 points.

On the daily charts, both the indices completed a Bearish Engulfing pattern on Wednesday which indicates a short term reversal in trend. Next day both the indices formed a small white body candle inside the previous days black body candle but it cannot be classified as Bullish Harami as that pattern occurs in a downtrend which is not the case here. On the weekly chart, both the indices have formed a small Black body Spinning Top which is a neutral formation but can have bearish effect if the next weeks candle is bearish. Thus daily as well as weekly candlestick patterns are suggesting a bearish bias in the near term.

Strong Support for the market is seen at Sensex 29039 and Nifty 8789. A breach of these support levels will open the doors for the market to test the lower boundary of Broadening Ascending Wedge which falls at Sensex 27700 and Nifty 8342.

Despite the fluctuations in the market, both the indices continued to stay above the short term average of 20dma (Sensex – 29054 and Nifty – 8791), medium term average of 50dma (Sensex – 28526 and Nifty – 8616) and even the long term average of 200dma (Sensex – 26915 and Nifty – 8069). Thus the trend in the short term, medium term and long term timeframe continues to remain bullish.

MACD and Price ROC are both positive and continue with their Buy signals. RSI (59) suggests that bullish momentum is intact. MFI continues to move higher at 68, indicating positive money flow. Stochastic Oscillator %K (70) is below %D and hence it is in Sell mode. ADX has moved higher to 23, suggesting uptrend is now gathering strength. Directional Indicators continue in Buy mode as +DI remains above –DI. OBV continues in Buy mode making higher top higher bottom formation. Thus majority of Oscillators are suggesting a bullish bias in the near term. 

Option data suggest highest Call Open Interest buildup still remains at the strike of 9000, whereas the highest Put build-up continues at the strike of 8500. Thus Option data suggests a trading range with support coming in at 8500 and resistance around 9000. Friday saw strong build-up for 8900 Put which indicates that the level of 8900 might act as strong support.

Trendline Resistance for the Sensex is at 30379. Trendline Support for the Sensex is at 29039.

Trendline Resistance for the Nifty is at 9167. Trendline Support for the Nifty falls at 8789.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8605

8726

8840

8937

8996

9119

9215

Sensex

28566

28875

29162

29448

29786

30024

30443

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy Maruti

3620

3758

3790

125

Rs.21,250

Buy HPCL

620

669

670

500

Rs.25,000

Buy NTPC

155

162

160

2000

Rs.10,000

Buy DishTV

85

90

88

4000

Rs.12,000

MuthootFn

238

246

240

1000

Rs. 2,000

Total

Rs.70,250.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy CoLPaL

2070

2028

2134

2199

Buy Glenmark

833

808

872

912

Buy Aban

501

480

534

569

Buy IOC

348

337

365

383

Buy JPAss

28

26

32

36

 WATCH OUT FOR:

IOC

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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