Archives : MID-CAPS TO OUTPERFORM NIFTY - 23/03/2016.

MID-CAPS TO OUTPERFORM NIFTY - 23/03/2016.

NIFTY HALTS AT RESISTANCE ZONE.

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Both the indices continued their upward march and managed to test and close within the Bearish Falling Gap between Sensex 25230-25661 and Nifty 7674-7721. Even though the short term and intermediate term trend remains positive, it seems that the indices are getting fatigued and might consolidate first before continuing further. In such a scenario, the small and midcap stocks are more likely to outperform the chief indices in the near term.


MID-CAPS TO OUTPERFORM NIFTY - 23/03/2016.

NIFTY HALTS AT RESISTANCE ZONE.

Both the indices continued their upward march and managed to test and close within the Bearish Falling Gap between Sensex 25230-25661 and Nifty 7674-7721. Even though the short term and intermediate term trend remains positive, it seems that the indices are getting fatigued and might consolidate first before continuing further. In such a scenario, the small and midcap stocks are more likely to outperform the chief indices in the near term.

TECHNICALLY SPEAKING.

Sensex opened the week at 25007, made a high of 25381, low of 24988 and closed the week at 25337. Thus it closed the week with a loss of 385 points. At the same time the Nifty opened the week at 7619, made a high of 7728, low of 7617 and closed the week at 7716. Thus the Nifty closed the week with a gain of 112 points.

On the daily charts, both the indices have formed a Doji on Wednesday. This is the second successive neutral formation in past two days, which points towards Bearish reversal provided one gets a bearish confirmation on coming Monday. On the weekly charts, both the indices opened with an upward Gap and formed an Opening white body Marubuzo, which indicates continuation of Bullishness. Thus candlestick pattern study indicates a bullish bias.

This week has seen both Sensex and Nifty registering a Bullish Upward Gap between Sensex 24986-24988 and Nifty 7613-7617, not only on the daily chart but even on weekly chart. This Gap is likely to act as strong support. Besides the above Gap, both Sensex and Nifty have also left behind two Bullish Rising Gaps first between Sensex 24043-23821 and Nifty 7308-7235 and second between Sensex 24280-24383 and Nifty 7380-7406. Both these Gaps will not only provide support but are also Measuring Gaps. The relevant primary Target as per Gap Theory falls at Sensex 25370 and Nifty 7718 and secondary Target is at Sensex 26169 and Nifty 7961.

The Pull-Back has got extended, so besides reaching primary Gap Theory Target of Sensex 25370 and Nifty 7718 as mentioned above, both the indices have also concurrently run into higher Bearish Gap between Sensex 25230-25357 and Nifty 7674-7721. This Gap is now acting as strong Resistance.

The market is in midst of a strong Pull-Back rally of the fall from Sensex 27618 and Nifty from 8336. The relevant Retracement levels for are placed at Sensex 24452-25056-25661 and Nifty 7403-7581-7759. Currently, both the indices are testing the critical 61.8% Retracement level which is at Sensex 25661 and Nifty 7759. Any closing above this level will lead the indices towards testing the 200dma.

MACD and Price ROC both are positive and continue with their Buy signals. RSI (67) suggests Bullish Momentum. ADX has dropped further to below 20 and is at 18, suggesting that the prior Down-Trend has lost all its strength. Directional Indicators is in Buy mode as +DI remains above –DI. MFI (79) suggests Positive Money Flow. OBV continues to make higher Top, higher Bottom formation. Thus majority of Oscillators are suggesting a positive bias in the near term.

This week, both the indices managed to stay and close above the short term average of 20dma (Sensex – 24395 and Nifty – 7416) and even the medium term average of 50dma (Sensex – 24227 and Nifty – 7364). But both Sensex and Nifty still continue to remain well below the long term average of 200dma (Sensex – 26053 and Nifty – 7902). Thus, the trend in the short term and medium term timeframe is positive whereas the trend in the long term timeframe remains bearish.

Options data indicate highest Call Open Interest build-up at 7800 and highest Put build-up at 7400. Thus Option data suggests a trading range with resistance coming in at 7800 and support at 7400.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7405

7512

7600

7716

7812

7906

7979

Sensex

24354

24698

25002

25337

25703

26058

26378

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

JubFood

1196

1241

1259

300

Rs.18,900

Buy SBI

191

199

198

2000

Rs.14,000

Buy UBI

127

132

132

3000

Rs.15,000

ApolloTyres

177

184

181

3000

Rs.12,000

Mothersumi

250

260

258

1500

Rs.12,000

Total

Rs.71,900.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy BajajFin

6874

6700

7135

7400

Buy ABB

1206

1180

1246

1289

Buy JetAir

554

541

574

595

Buy ReLCap

376

366

392

409

Buy SAiL

45

43

49

53

WATCH OUT FOR:

Rel Cap

TVS Motors

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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