Archives : BEARS IN COMMAND; 200DMA IN DANGER - 24/04/2015.

BEARS IN COMMAND; 200DMA IN DANGER - 24/04/2015.

INDICES FAIL TO HOLD AT CRITICAL LEVELS.

Except for Wednesday, it was Bears who were in command for the entire week. Every small rise got sold into and the Bears have managed to drag the market down near the long term support of 200dma. As a matter of fact, Sensex has just closed below the 200dma whereas the Nifty has managed to hold that level for the week. Next week, the intermittent bottom of Nifty 8269 which is coinciding with the long term support of 200dma will be under scanner; as a break of that level will open the doors for the Nifty to test 7882.

 

 


BEARS IN COMMAND; 200DMA IN DANGER - 24/04/2015.

INDICES FAIL TO HOLD AT CRITICAL LEVELS.

Except for Wednesday, it was Bears who were in command for the entire week. Every small rise got sold into and the Bears have managed to drag the market down near the long term support of 200dma. As a matter of fact, Sensex has just closed below the 200dma whereas the Nifty has managed to hold that level for the week. Next week, the intermittent bottom of Nifty 8269 which is coinciding with the long term support of 200dma will be under scanner; as a break of that level will open the doors for the Nifty to test 7882.

TECHNICALLY SPEAKING.

Sensex opened the week at 28525, made a high of 28539, low of 27344 and closed the week at 27437. Thus it closed the week with a loss of 1005 points. At the same time the Nifty opened the week at 8618, made a high of 8619, low of 8273 and closed the week at 8305. Thus the Nifty closed the week with a loss of 301 points.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 On the weekly charts, both the indices have formed an Opening Black body Marubuzo which indicates further bearishness. On the daily charts, both Sensex and Nifty have formed a big black body candle in line with ongoing bearishness. Thus daily as well as weekly candlestick patterns suggest bearishness in the near term.

This week both the indices continued to slide and as a result the market is now testing the strong support provided by the 200dma (Sensex – 27471 and Nifty – 8257) . In fact Sensex has just closed below this important level whereas the Nifty has just stopped above this level. A breach of this level will not only signal a reversal in the long term trend but also open the doors for Nifty to test sub-8000 levels.

Both the indices are moving towards target of Bearish Rising Wedge pattern which falls at 26049 for the Sensex and 7882 for the Nifty. Besides this, both the Sensex and Nifty had also completed an Ascending Broadening pattern and the target for that pattern is at Sensex 25034 and Nifty 7533. This week, when Nifty closed below the 8335, it completed a Head and Shoulders pattern which is a bearish pattern. Target as per this pattern is at Sensex 24486 and Nifty 7425.

The market is now testing the long term average of 200dma (Sensex – 27471 and Nifty – 8257); with Nifty just staying above this level whereas Sensex managing to close below this level. Both Sensex and Nifty continue to stay below the medium term average of 50dma (Sensex – 28619 and Nifty – 8676) as well as the short term average of 20dma (Sensex – 28214 and Nifty – 8561). Thus the trend in the long term is being tested whereas the trend in the short term as well as medium term timeframe remains bearish.

MACD and Price ROC are both negative and continue with their Sell signal. RSI (34) has turned lower suggesting further increase in bearish momentum. Stochastic Oscillator %K (17) remains below %D; continues in Sell mode. OBV has made a lower top. ADX at 18 suggests that the market still is in a wide trading range. Directional Indicators continue with its Sell signal as +DI remains below –DI. Thus Oscillators are suggesting bearishness to continue in the near term. 

Option data suggest highest Call Open Interest buildup is at the strike of 8500 and highest Put build-up is at the strike of 8200. Thus Option data suggests a trading range with support coming in at 8200 and resistance around 8500. Friday saw strong Call writing at the 8400 strike which suggests that in the near term the level of 8400 will act as an immediate resistance level.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7961

8082

8208

8305

8380

8504

8612

Sensex

26368

26776

27051

27437

27786

28087

28384

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Siemens

1326

1251

1212

250

Rs.28,500

JubFood

1474

1429

1394

250

Rs.20,000

ApolloHosp

1318

1233

1215

250

Rs.25,750

Sell UPL

429

402

397

500

Rs.16,000

JsWEngy

113

108

110

2000

Rs. 6,000

Total

Rs.96,250.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell Wockhardt

1625

1660

1573

1518

Sell M&M

1172

1191

1143

1113

Sell AuroPh

1289

1313

1252

1213

Sell ABNuvo

1561

1588

1518

1474

Sell AsianPnts

771

788

745

719

WATCH OUT FOR:

M&M

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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