Archives : 8350-8650 : NIFTY RANGE TRADE CONTINUES - 07/08/2015.

8350-8650 : NIFTY RANGE TRADE CONTINUES - 07/08/2015.

POSITIVE BIAS CONTINUES.

This was the second week where the indices failed to show a decisive directional move as the Nifty gained just 32 points this week. As a result the market continues to move in a Nifty range of 8654 on the higher side and 8321 on the lower side. A strong directional movement can be expected when the indices break out of this trading range. An upward break will not only signal end of correction but also a potential move towards the top, whereas a downward break will lead the Nifty to test the strong make or break support of 8195.

 


8350-8650 : NIFTY RANGE TRADE CONTINUES - 07/08/2015.

POSITIVE BIAS CONTINUES.

This was the second week where the indices failed to show a decisive directional move as the Nifty gained just 32 points this week. As a result the market continues to move in a Nifty range of 8654 on the higher side and 8321 on the lower side. A strong directional movement can be expected when the indices break out of this trading range. An upward break will not only signal end of correction but also a potential move towards the top, whereas a downward break will lead the Nifty to test the strong make or break support of 8195.

TECHNICALLY SPEAKING.

Sensex opened the week at 28089, made a high of 28359, low of 27866 and closed the week at 28236. Thus it closed the week with a gain of 122 points. At the same time the Nifty opened the week at 8510, made a high of 8606, low of 8448 and closed the week at 8564. Thus the Nifty closed the week with a gain of 32 points.

On the daily charts, both the indices made a Spinning Top formation on Thursday but there was no follow up bearish candle on Friday. On Friday, both Sensex and Nifty formed small black body candle. On the weekly charts both the indices formed a small white body candle. Thus candlestick analysis suggests no preference in directional movement.

The market is within striking distance of a key Retracement level of 61.8%, which falls at Sensex 28604 and Nifty 8668. Two weeks back, both the indices made a high of Sensex 28578 and Nifty 8654 before drawing lower. The top of both Sensex and Nifty has been tested almost around four times, which has resulted in a Tweezer Top formation. Combining 61.8% with the Tweezer Top will form a strong Resistance zone i.e. between Sensex 28578-28604 and Nifty 8654-8668. Thus any close above these levels will signal an end to Correction and a resumption of prior uptrend.

On the lower side a break of Sensex 27416 and Nifty 8321 will complete a bearish pattern, which will lead the indices lower to test the Strong Support zone between Sensex 27209-27174 and Nifty 8213-8186. This Support zone is a result of confluence between the Bullish Upward Gap between Sensex 27202-27175 and Nifty 8195-8186, an intermediate low made by Sensex 27209 and Nifty 8195 and 61.8% Retracement of the current rise i.e. Sensex 27174 and Nifty 8213. A breach of this support zone will pave the way to test the lows of Sensex 26307 and Nifty 7940.

This week, both the indices successfully tested the short term average of 20dma (Sensex – 28100 and Nifty – 8517). Both the indices continue to remain above medium term average of 50dma (Sensex – 27648 and Nifty – 8362) and also the long term average of 200dma (Sensex – 27968 and Nifty – 8443). Thus the trend in the long term, medium term and even the short term timeframe continues to remain up. 

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.

Options data for August series indicates highest Put Open Interest buildup at the strike of 8200 and highest Call build-up is at the strike of 8800. Thus Option data suggests a wide trading range with resistance coming in at 8800 and support around 8200.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8195

8321

8448

8564

8654

8774

8849

Sensex

27000

27416

27866

28236

28578

28875

29183

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Wockhardt

1564

1617

1628

250

Rs.16,000

BhartFrg

1147

1223

1257

250

Rs.27,500

Buy ITC

326

336

333

1000

Rs. 7,000

AndhraBnk

74

78

78

4000

Rs.16,000

BomDyeing

87

94

94

4000

Rs.28,000

Total

Rs.94,500.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Ceat

1021

995

1061

1103

Buy HPCL

970

945

1008

1047

Buy TataMotors

393

385

407

421

Buy Exide

159

154

167

175

Buy RCom

73

71

77

81

 

WATCH OUT FOR:

 

RCOM

 

 

 

 

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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