Archives : MARKET CONTINUES TO GATHER STRENGTH - 17/07/2015.

MARKET CONTINUES TO GATHER STRENGTH - 17/07/2015.

WATCH OUT FOR NIFTY - 8668.

With every passing day, the market is gaining strength and overcoming key resistances. As a result the Bears are losing momentum. Both indices have closed above their intermittent tops of Sensex 28335 and Nifty 8561. Nifty is very near to its key Retracement level of 8668 and any close above that level will signal end of this Correction and resumption of prior uptrend.

 

 


MARKET CONTINUES TO GATHER STRENGTH - 17/07/2015.

WATCH OUT FOR NIFTY - 8668.

With every passing day, the market is gaining strength and overcoming key resistances. As a result the Bears are losing momentum. Both indices have closed above their intermittent tops of Sensex 28335 and Nifty 8561. Nifty is very near to its key Retracement level of 8668 and any close above that level will signal end of this Correction and resumption of prior uptrend.

TECHNICALLY SPEAKING.

Sensex opened the week at 27739, made a high of 28576, low of 27635 and closed the week at 28463. Thus it closed the week with a gain of 802 points. At the same time the Nifty opened the week at 8397, made a high of 8642, low of 8355 and closed the week at 8609. Thus the Nifty closed the week with a gain of 249 points.

On the daily charts, both the indices made a black body Spinning Top formation on Friday. On the weekly charts, both the indices have formed a big white body candle in line with the uptrend. Thus candlestick patterns suggest continuation of bullish momentum in the near term.

The market is witnessing a pull-back of the fall from Sensex 30024 to 26307 and Nifty 9119 to 7940 and the key Retracement level of 61.8% falls at Sensex 28604 and Nifty 8668. Thus any close above these levels will indicate that the Correction is complete and will signal a resumption of prior uptrend.

This week, both the indices have made a Bullish Upward Rising Gap between Sensex 28218-28245 and Nifty 8531-8542. This Gap will act as strong support going forward. Also if the gap is considered as a Measuring Gap then the immediate target falls at Sensex – 28933 and Nifty – 8758.

Strong Support zone exists between Sensex 27209-27175 and Nifty 8195-8186 which is a result of confluence between the Bullish Upward Gap between Sensex 27202-27175 and Nifty 8195-8186 and an intermittent low made by Sensex 27209 and Nifty 8195. A breach of this support zone will pave the way for testing of the lows made at Sensex 26307 and Nifty 7940.

This week, both the indices managed to stay above the long term average of 200dma (Sensex – 27847 and Nifty – 8397), medium term average of 50dma (Sensex – 27491 and Nifty – 8308) and even the short term average of 20dma (Sensex – 27938 and Nifty – 8434). Thus the trend in the long term, medium term and even the short term timeframe has turned bullish. 

Bearish pattern formations still remain intact and hence one can still expect indices to achieve the target of Bearish Rising Wedge pattern which falls at 26049 for the Sensex and 7882 for the Nifty, as well as Ascending Broadening pattern and the target for that pattern is at Sensex 25034 and Nifty 7533. Coupled with this, both the indices had also completed a Head and Shoulders pattern and the target as per this pattern is at Sensex 24486 and Nifty 7425. The above mentioned patterns will fail if Sensex closes above 29094 and Nifty above 8844.

MACD and Price ROC are positive and continue with their Buy signals. RSI (64) indicates strong bullish momentum. Stochastic Oscillator %K (93) and MFI (83) have entered overbought zone. OBV has started making higher top higher bottom formation. ADX continues to be at a low level of 17, suggesting lack of strength in the current trend. Directional Indicators continue in Buy mode as +DI remains above –DI. Bollinger band has signaled a Buy on Thursday as price closed above the upper band. Thus majority of Oscillators are suggesting a bullish bias in the near term.

Options data for July series indicates highest Put Open Interest buildup at the strike of 8500 and highest Call build-up is at the strike of 8700. Thus Option data suggests a narrow trading range with resistance coming in at 8700 and support around 8500.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8315

8423

8504

8609

8726

8844

8913

Sensex

27404

27703

28087

28463

28822

29183

29522

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Sell Infosys

938

905

932

500

Rs. 3,000

Sell JsWStL

830

804

820

500

Rs. 5,000

Sell Voltas

312

297

305

1000

Rs. 7,000

Sell SunTV

275

263

265

1000

Rs.10,000

PowerGrid

139

134

137

2000

Rs. 4,000

Total

Rs.29,000.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy BEL

3648

3579

3755

3864

Buy AjantaPh

1673

1634

1735

1799

Buy LiCHsg

475

467

488

502

Buy ReLInfra

424

416

437

451

Buy RCom

70

68

74

78

WATCH OUT FOR:

LIC Hsg

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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