Archives : SELL ON EVERY RISE - 28/08/2015.

SELL ON EVERY RISE - 28/08/2015. 

BLACK MONDAY.

We hit Bulls eye last week as the market cracked as predicted; with the Nifty achieving its target for Bearish Descending Triangle (7998) and even Bearish Rising Wedge (7882) patterns on Monday itself. It was another Black Monday where the benchmark cracked by more than 1700 points. As a result, bearish pattern of higher degree (Head & Shoulders) is getting confirmed, which is not at all good news for the Bulls. Current Pull-back of the last three days can be termed as a dead cat bounce and it will be sold into.


SELL ON EVERY RISE - 28/08/2015. 

BLACK MONDAY.

We hit Bulls eye last week as the market cracked as predicted; with the Nifty achieving its target for Bearish Descending Triangle (7998) and even Bearish Rising Wedge (7882) patterns on Monday itself. It was another Black Monday where the benchmark cracked by more than 1700 points. As a result, bearish pattern of higher degree (Head & Shoulders) is getting confirmed, which is not at all good news for the Bulls. Current Pull-back of the last three days can be termed as a dead cat bounce and it will be sold into.

TECHNICALLY SPEAKING.

Sensex opened the week at 26730, made a high of 26730, low of 25298 and closed the week at 26392. Thus it closed the week with a loss of 974 points. At the same time the Nifty opened the week at 8055, made a high of 8091, low of 7667 and closed the week at 8001. Thus the Nifty closed the week with a loss of 298 points.

On the daily charts, Sensex completed a Stick Sandwich pattern on Wednesday whereas Nifty made a Unique Three River Bottom. As a result the indices staged a minor recovery but last four days candle bodies lie inside Mondays Opening Black body Marubuzo’s trading range, which has the potential to form Falling Three Methods. It will get confirmed if we form a big bearish candle on Monday. On the weekly chart, Sensex has formed a Black body Hammer whereas the Nifty has formed a pattern more similar to Spinning Top. Thus daily chart suggest more bearishness in the near term as compared to the weekly charts.

Last four days has seen both the indices staging a minor recovery from the lows (Sensex 25298 and Nifty 7667), which can be termed as a dead cat bounce. The relevant Retracement levels are placed at Sensex 26551-26938-27325 and Nifty 8044-8161-8277.

Both the indices opened with a big Gap down on Monday and it resulted in a Bearish Falling Gap on daily as well as weekly chart i.e. between Sensex 26730-27131 and Nifty 8091-8225. This gap combined with 50% Retracement level (Sensex 26938 and Nifty 8161) will act as a strong Resistance zone going forward.

The fall on Monday helped achieve the target for Bearish Rising Wedge (which was at 26049 for the Sensex and 7882 for the Nifty). But targets for Ascending Broadening pattern (Sensex 25034 and Nifty 7533) and Head and Shoulders pattern (Sensex 24486 and Nifty 7425) still remain intact. This week a higher degree Head and Shoulders got completed on Monday and the target as per that pattern falls at Sensex 22552 and Nifty 6741. The above mentioned patterns will fail only if Sensex closes above 28578 and Nifty above 8654.

MACD and Price ROC are both negative and continue in Sell mode. RSI (38) indicates bearish momentum. MFI (40) suggests negative money flow. OBV has started making lower top lower bottom formation. ADX @ 28 suggest that the current down trend is strong. Directional indicators continue in Sell mode. Bollinger Band gave a Sell signal on Monday and that signal continues. Thus Oscillators suggest bearishness.

This week, both the indices continued to remain below the short term average of 20dma (Sensex – 27442 and Nifty – 8326), the medium term average of 50dma (Sensex – 27751 and Nifty – 8402) and even the long term average of 200dma (Sensex – 27957 and Nifty – 8449). Thus the trend in the short term, medium term and even the long term timeframe continues to remain bearish.

Volatility Index India VIX shot by massive 70% in Mondays trade itself. After closing the week around 23, it is aiming for a target of 39. Options data for September series indicates highest Put Open Interest build-up at the strike of 7400 and highest Call build-up is now at the strike of 8500. Thus Option data suggests a very wide trading range with resistance coming in at 8500 and support around 7400.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7667

7796

7915

8001

8122

8225

8359

Sensex

25298

25659

25999

26392

26730

27131

27564

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

HeroMoto

2555

2413

2364

125

Rs.23,875

ApolloHosp

1302

1225

1195

250

Rs.26,750

Sell SRF

1269

1188

1017

250

Rs.63,000

Sell IndusInd

905

846

830

500

Rs.37,500

Sell CenTex

664

619

506

500

Rs.79,000

Total

Rs.2,30,125.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell BajajAuto

2280

2355

2167

2052

Sell L&T

1616

1650

1563

1509

Sell ACC

1363

1394

1316

1267

Sell Bhel

235

243

222

208

Sell Hexaware

236

243

224

211

WATCH OUT FOR:

L&T Rising Wedge

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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