Archives : SUB-7000 LEVELS SOON - 11/12/2015.

SUB - 7000 LEVELS SOON - 11/12/2015. 

BEARISH BREAKOUT THIS WEEK.

As mentioned in the previous week’s article, Nifty closed below 7723 on Tuesday and another Bearish Head and Shoulder got completed and the target as per that pattern falls at Nifty 7092. In the near term, the Nifty has immediate support coming at 7539 and Sensex at 24833. The existing bearish momentum suggests that these levels will be taken out sooner rather than later. Thus every rise or pull-back should be seen as a shorting opportunity and not as an opportunity to buy.


SUB - 7000 LEVELS SOON - 11/12/2015. 

BEARISH BREAKOUT THIS WEEK.

As mentioned in the previous week’s article, Nifty closed below 7723 on Tuesday and another Bearish Head and Shoulder got completed and the target as per that pattern falls at Nifty 7092. In the near term, the Nifty has immediate support coming at 7539 and Sensex at 24833. The existing bearish momentum suggests that these levels will be taken out sooner rather than later. Thus every rise or pull-back should be seen as a shorting opportunity and not as an opportunity to buy.

TECHNICALLY SPEAKING.

Sensex opened the week at 25746, made a high of 25785, low of 24930 and closed the week at 25044. Thus it closed the week with a loss of 594 points. At the same time the Nifty opened the week at 7816, made a high of 7825, low of 7575 and closed the week at 7610. Thus the Nifty closed the week with a loss of 171 points.

On the weekly charts, both the indices have formed a real black body candle, for the second week running. On the daily charts, both Sensex and Nifty have formed a Stick Sandwich pattern. This is a bullish reversal pattern which requires confirmation. Thus weekly candlestick pattern suggests bearishness to continue in the near term.

This week when the Sensex closed below 25517 and Nifty below 7723, both the indices completed a Bearish Head and Shoulders, the target for which falls at Sensex 23276 and Nifty 7092. Besides this formation, both the indices remain on track to achieve the targets for Head and Shoulders pattern (Sensex 24486 and Nifty 7425) and also a higher degree Head and Shoulders, the target for which falls at Sensex 22552 and Nifty 6741.

Applying Fibonacci Retracement analysis on both the indices, gives two strong confluence zones which can be termed as Target Zone 1 and Target Zone 2. Target Zone 1 is from Sensex 22914-22580 and Nifty 6860-6803 whereas Target Zone 2 for the Sensex falls at 21108-20823 and Nifty 6338-6284.

MACD and Price ROC are both negative and continue in Sell mode. RSI (33) suggests continuation of bearish momentum. Stochastic Oscillator %K (10) has just gone above %D, signalling a Buy. OBV continues to make lower top lower bottom formation and hence in Sell mode. MFI (40) indicates negative money flow in the market. Bollinger Band signalled a Sell on Thursday when price closed below the lower band. ADX has moved higher to 33, which indicates that the downtrend is very strong. The Directional Indicators continue in Sell mode as +DI remains below –DI. Thus majority of the Oscillators are negative and indicate a bearish bias.

This week, both the indices continued to remain below the short term average of 20dma (Sensex – 25714 and Nifty – 7809), medium term average of 50dma (Sensex – 26324 and Nifty – 7980) and the long term average of 200dma (Sensex – 27274 and Nifty – 8259). Thus the trend in the short term, medium term and long term timeframe continues to remain bearish.

Options data for December series indicates highest Put Open Interest build-up at the strike of 7500 and highest Call build-up at the strike of 8000. Thus Option data suggests a trading range with resistance coming in at 8000 and support at 7500.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7353

7422

7504

7610

7723

7853

7979

Sensex

23742

24206

24644

25044

25386

25810

26256

 LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. PriceTgtReachedLot SizeProfit
EicherM1642957211545025Rs.24,475
Sell TCS232822572315125Rs. 1,625
Sell HDFC117211461150250Rs. 5,000
AuroPh807778781500Rs.13,000
AndhraBk6662614000Rs.20,000
    TotalRs.64,100.

   

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell Maruti

4480

4559

4359

4235

Sell Lupin

1740

1783

1675

1606

Sell Pidilite

527

541

505

482

Sell STFC

808

830

775

740

Sell Castrol

416

427

398

379

WATCH OUT FOR:

Lupin

Nifty Retracement Analysis

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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