Archives : NIFTY IN BEAR GRIP; SOUTHWARD JOURNEY TO CONTINUE IN MAY - 30/04/2015.

NIFTY IN BEAR GRIP; SOUTHWARD JOURNEY TO CONTINUE IN MAY - 30/04/2015.

LONG TERM TREND TURNS BEARISH.

Even though it was a truncated week, there was no shortage of bearishness. The market breached key support levels and closed below them. The long term support of 200dma was expected to provide strong support but it was taken out by the bears with ease; thus turning the long term trend down. Also the bearish pattern formations continued as the downside projections point towards a target of 7882 – 7425 for the Nifty. Traditionally the month of May has been more than favourable for the bears and it seems that it would be no different this time. It is time the Bulls packed their bags to take off for a vacation.

 

 


NIFTY IN BEAR GRIP; SOUTHWARD JOURNEY TO CONTINUE IN MAY - 30/04/2015.

LONG TERM TREND TURNS BEARISH.

Even though it was a truncated week, there was no shortage of bearishness. The market breached key support levels and closed below them. The long term support of 200dma was expected to provide strong support but it was taken out by the bears with ease; thus turning the long term trend down. Also the bearish pattern formations continued as the downside projections point towards a target of 7882 – 7425 for the Nifty. Traditionally the month of May has been more than favourable for the bears and it seems that it would be no different this time. It is time the Bulls packed their bags to take off for a vacation.

TECHNICALLY SPEAKING.

Sensex opened the week at 27565, made a high of 27567, low of 26897 and closed the week at 27011. Thus it closed the week with a loss of 426 points. At the same time the Nifty opened the week at 8330, made a high of 8334, low of 8144 and closed the week at 8181. Thus the Nifty closed the week with a loss of 124 points.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  On the daily as well as weekly charts, both the indices have formed an Opening Black body Marubuzo. The daily candle indicates continuation of bearishness whereas the weekly candle is a part of Three Black Crows which is a bearish pattern. On the monthly chart, both the indices have formed big black body candle for the second consecutive month. Thus daily as well as weekly candlestick patterns suggest bearishness in the near term.

This week both the indices managed to breach the important long term support of 200dma (Sensex – 27506 and Nifty – 8269), whereby not only the long term trend has turned bearish but key support is now broken and the Nifty is likely to test sub-8000 levels. Both Sensex and Nifty continue to stay below the medium term average of 50dma (Sensex – 28499 and Nifty – 8640) as well as the short term average of 20dma (Sensex – 28104 and Nifty – 8522). Thus the trend in the long term has turned bearish whereas the trend in the short term as well as medium term timeframe continues to remain down. 

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. Last week, when Nifty closed below 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.

MACD and Price ROC are both negative and continue with their Sell signal. RSI (32) has turned lower suggesting further increase in bearish momentum. Stochastic Oscillator %K (9) has gone above %D generating a buy signal. MFI has reduced to 28 suggesting negative money flow. OBV continues to make lower top lower bottom formation. ADX has increased to 24, suggesting that the current downtrend is gaining strength. 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 for the May series suggest highest Call Open Interest buildup is at the strike of 8800 and highest Put build-up is at the strike of 8100. Thus Option data suggests a wide trading range with support coming in at 8100 and resistance around 8800. Thursday saw strong Call writing at the 8500 strike which suggests that in the near term the level of 8500 will act as an immediate resistance level.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7856

7961

8065

8181

8284

8380

8504

Sensex

25910

26248

26688

27011

27385

27703

28087

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Wockhardt

1625

1518

1177

500

Rs.2,24,000

Sell M&M

1172

1143

1138

250

Rs. 8,500

AuroPh

1289

1213

1177

250

Rs.28,000

ABNuvo

1561

1518

1516

250

Rs.11,250

AsianPnts

771

745

730

500

Rs.20,500

Total

Rs.2,92,250.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell ACC

1434

1464

1388

1341

Sell JsWSt

932

951

903

873

Sell LiCHsg

430

441

413

395

Sell Titan

383

389

373

362

Sell Exide

172

176

165

157

WATCH OUT FOR:

Exide

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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