Archives : NIFTY HEADED SOUTHWARDS; BEARS BACK IN BUSINESS - 13/03/2015.

NIFTY HEADED SOUTHWARDS; BEARS BACK IN BUSINESS - 13/03/2015. 

RISING WEDGE COMPLETED.

The current week saw the market made various attempts to move higher but all the moves got sold into. After completing a bearish Rising Wedge pattern, it became clear that the market was headed lower. After receiving more positive news on Friday, the market again made a feeble attempt at moving higher but was stopped in its track at the pattern trendline. Thus the bears seem to have seized control as the both the short term as well as medium term trend has turned bearish and the Nifty is now headed lower to test the support level of 8373.

 

 


NIFTY HEADED SOUTHWARDS; BEARS BACK IN BUSINESS - 13/03/2015. 

RISING WEDGE COMPLETED.

The current week saw the market made various attempts to move higher but all the moves got sold into. After completing a bearish Rising Wedge pattern, it became clear that the market was headed lower. After receiving more positive news on Friday, the market again made a feeble attempt at moving higher but was stopped in its track at the pattern trendline. Thus the bears seem to have seized control as the both the short term as well as medium term trend has turned bearish and the Nifty is now headed lower to test the support level of 8373.

TECHNICALLY SPEAKING.

Sensex opened the week at 29316, made a high of 29321, low of 28448 and closed the week at 28503. Thus it closed the week with a loss of 945 points. At the same time the Nifty opened the week at 8891, made a high of 8891, low of 8631 and closed the week at 8647. Thus the Nifty closed the week with a loss of 290 points.

On the daily charts, both the indices have formed a pattern which is almost like a Bearish Mat Hold pattern, wherein the Friday’s big black body candle completely engulfs the previous three days bodies. Also on the weekly charts, both the indices have formed a big Opening Black body Marubuzo which is also acting as a confirmation to the Bearish Doji formed in the previous week. Thus daily as well as weekly candlestick patterns are suggesting continuation of bearishness in the near term.

On Monday key levels got breached and a Bearish Rising Wedge pattern got completed and now the indices are headed lower to test the lower boundary of Broadening Ascending Wedge which falls at Sensex 27789 and Nifty 8373. However the Rising Wedge pattern target falls at 27293-26129 for the Sensex and 8286-7881 for the Nifty.

As the market heads lower, we need to check the Correction levels of the rise from Sensex 26469 to 30024 and Nifty from 7961 to 9119. The relevant Correction levels falls at 28666-28247-27827 for the Sensex and 8676-8540-8403 for the Nifty.

This week the market breached and closed below both the short term average of 20dma (Sensex – 29104 and Nifty – 8816) as well as the medium term average of 50dma (Sensex – 28664 and Nifty – 8665). However, both the indices continue to remain well above the long term average of 200dma (Sensex – 27030 and Nifty – 8107). Thus the trend in the short term and medium term timeframe has turned bearish whereas the trend in the long term timeframe continues to remain up.

MACD and Price ROC both continue with their Sell signals. RSI (43) continues to stay below the equilibrium line suggesting the average of down closing is greater and hence indicates bearish momentum. MFI (55) is just hovering near the centerline. Stochastic Oscillator %K (11) continues to remain below %D and hence it is in Sell mode. ADX has moved lower to a level of 18, which suggests that the prior uptrend has lost all of its strength. Directional Indicators have given a fresh Sell signal on Friday as +DI went below –DI. Thus majority of Oscillators are suggesting a bearish 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 8700 Call which indicates that the level of 8700 might act as strong resistance.

Trendline Resistance for the Sensex is at 29297. Trendline Support is at 28042.

Trendline Resistance for the Nifty is at 8867. Trendline Support falls at 8499.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8326

8445

8531

8647

8745

8849

8913

Sensex

27512

27851

28176

28503

28840

29183

29522

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

CoLPaL

2070

2134

2139

125

Rs. 8,625

Glenmark

833

872

865

500

Rs.16,000

Buy Aban

501

534

510

500

Rs. 4,500

Buy IOC

348

365

351

1000

Rs. 3,000

Buy JPAss

28

32

29

8000

Rs. 8,000

Total

Rs.40,125.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell UltraTech

2946

2993

2872

2797

Sell LiCHsg

447

464

421

394

Sell Arvind

286

295

272

257

Sell TataGlob

155

159

148

141

Sell IndCem

96

99

91

85

WATCH OUT FOR:

India Cem

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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