Archives : HOMING PIGEON ON WEEKLY CHARTS - 08/05/2015.

HOMING PIGEON ON WEEKLY CHARTS - 08/05/2015.

PULL-BACK RALLY.

After the carnage witnessed on Wednesday, the market returned to sanity and started the much required pull-back rally but not before touching the 8000 mark on Nifty. The question on every traders mind is whether the correction is over? The answer still remains in the negative, as the current upward move can be termed only as a retracement of the current fall and not a resumption of prior uptrend. The uptrend will resume only if the Nifty closes above 8690. Hence every rally will be used by the bears to go short on the market.

 


HOMING PIGEON ON WEEKLY CHARTS - 08/05/2015.

PULL-BACK RALLY.

After the carnage witnessed on Wednesday, the market returned to sanity and started the much required pull-back rally but not before touching the 8000 mark on Nifty. The question on every traders mind is whether the correction is over? The answer still remains in the negative, as the current upward move can be termed only as a retracement of the current fall and not a resumption of prior uptrend. The uptrend will resume only if the Nifty closes above 8690. Hence every rally will be used by the bears to go short on the market.

TECHNICALLY SPEAKING.

Sensex opened the week at 27204, made a high of 27603, low of 26423 and closed the week at 27105. Thus it closed the week with a small gain of 94 points. At the same time the Nifty opened the week at 8230, made a high of 8355, low of 7997 and closed the week at 8191. Thus the Nifty closed the week with a marginal gain of 10 points.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 On the daily charts, both the indices have formed a white body candle on Friday, thereby completing a Morning Star formation. It is not a very strong formation as the white candle on Friday does not even go above the midpoint of Wednesdays black candle. On the weekly charts, both Sensex and Nifty have formed a black body Spinning Top. Last two weeks candle pattern completes a Homing Pigeon formation. This is a bullish reversal pattern but requiring confirmation. Thus daily as well as weekly candlestick patterns suggest minor pull-back in the near term.

After breaking the key level of 200dma, as expected the Nifty touched 8000 level before staging a recovery. Currently the market is witnessing a pull-back and the immediate pull-back levels are placed at Sensex 27444-27759-28074 and Nifty 8320-8420-8521.

In the near term the 200dma (Sensex – 27538 and Nifty – 8282) along with 38.2% Retracement level i.e. Sensex 27444-27538 and Nifty 8282-8320 will act as resistance zone going forward.

This week both the indices managed to stay below the important long term average of 200dma (Sensex – 27538 and Nifty – 8282), medium term average of 50dma (Sensex – 28284 and Nifty – 8577) as well as the short term average of 20dma (Sensex – 27775 and Nifty – 8416). Thus the trend in the short term, medium term and also the long term timeframe continues to remain down. 

Both the indices are progressing 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. Coupled with this, both the indices have also completed a Head and Shoulders pattern and the 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 (40) has moved higher but still suggests bearish momentum. Stochastic Oscillator %K (13) remains below %D, thereby continuing with a Sell signal. MFI (32) suggests negative money flow. OBV continues to make lower top lower bottom formation. ADX has increased to 26, 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.

Options data indicates highest Call Open Interest buildup at the strike of 8500 and highest Put build-up is at the strike of 8000. Thus Option data suggests a wide trading range with support coming in at 8000 and resistance around 8500.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7841

7961

8082

8191

8269

8355

8470

Sensex

25910

26423

26776

27105

27390

27786

28087

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Sell ACC

1434

1388

1386

250

Rs.12,000

JsWSt

932

903

875

500

Rs.28,500

LiCHsg

430

413

401

1000

Rs.29,000

Sell Titan

383

362

334

1000

Rs.49,000

Sell Exide

172

157

150

2000

Rs.44,000

Total

Rs.1,62,500.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell Grasim

3493

3566

3383

3271

Sell TCS

2527

2571

2460

2392

Sell M&M

1180

1203

1144

1107

Sell IGL

398

408

383

367

Sell PFC

256

261

248

239

WATCH OUT FOR:

IGL

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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