Archives : VOLATILE IN A RANGE - 17/06/2016.

VOLATILE IN A RANGE - 17/06/2016. 

20DMA ACTS AS STRONG SUPPORT.

The market has settled in a small range of Nifty 8050 on the lower side and 8300 on the higher side. Weekly movement on the indices has been zero, but that does not depict the real picture. Global concerns are weighing heavy on the market and as a result Volatility has been on an upswing. Interestingly, both Sensex and Nifty took support at the short term moving average of 20dma, for all days of the past week. A close below the 20dma will pave the way for the indices to test the strong support at the Bullish Gap between Nifty 7948-7941.


VOLATILE IN A RANGE - 17/06/2016. 

20DMA ACTS AS STRONG SUPPORT.

The market has settled in a small range of Nifty 8050 on the lower side and 8300 on the higher side. Weekly movement on the indices has been zero, but that does not depict the real picture. Global concerns are weighing heavy on the market and as a result Volatility has been on an upswing. Interestingly, both Sensex and Nifty took support at the short term moving average of 20dma, for all days of the past week. A close below the 20dma will pave the way for the indices to test the strong support at the Bullish Gap between Nifty 7948-7941.

TECHNICALLY SPEAKING.

Sensex opened the week at 26468, made a high of 26752, low of 26262 and closed the week at 26625. Thus it closed the week with a minor loss of 10 points. At the same time the Nifty opened the week at 8102, made a high of 8213, low of 8063 and closed the week at 8170. Thus the Nifty closed the week without any gain or loss.

On the daily charts, both Sensex and Nifty have made a Doji formation. This is a neutral formation and a sign of uncertainty and indecisiveness. Next day i.e. Monday’s candle will provide the required direction. On the weekly charts, both the indices have made a small white body candle which is also a neutral formation. Thus daily as well as weekly candlestick patterns suggest indecisiveness. 

Both the indices are undergoing a Retracement of the entire fall from Sensex 30024 to 22494 and Nifty 9119 to 6825. The relevant Retracement levels are placed at Sensex 25371-26259-27148 and Nifty 7702-7972-8243. 61.8% Retracement of Sensex (27148) is acting as a very strong hurdle and a close above it will mark the end of Correction phase and will signal a move towards testing the life highs of Sensex 30024 and Nifty 9119.

MACD despite being positive, continues in Sell mode and so does the Price ROC. RSI (58) suggests continuation of bullish momentum. Stochastic Oscillator %K (47) is in Sell mode as it is below %D. ADX has dropped to 20, which suggest that uptrend is undergoing a consolidation. Directional Indicators continue in Buy mode as +DI remains above –DI. Buy signal continues in Bollinger Band since last three weeks. MFI (55) suggests Positive Money Flow. Thus majority of Oscillators are suggesting a bullish bias in the near term.

This week, both the indices tested and took support at the short term average of 20dma (Sensex – 26505 and Nifty – 8122) for all five days of the week. Also both Sensex and Nifty continue to remain above medium term average of 50dma (Sensex – 25898 and Nifty – 7934) and even the long term average of 200dma (Sensex – 25517 and Nifty – 7767). Thus the trend in the short term, medium term and the long term timeframe continues to remain Bullish.

A break of the 20dma will not only turn the short term to Bearish, but will open the door to sub-8000 levels and a testing of the Bullish Gap between Sensex 25941-25897 and Nifty 7948-7941.

Options data for June series indicate highest Call Open Interest build-up remains at the strike of 8300 and highest Put build-up still remains at 8000. Thus Option data suggests a trading range with resistance coming in at 8300 and support at 8000.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

7889

7978

8074

8170

8252

8336

8448

Sensex

25479

25941

26314

26625

26994

27305

27618

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy ReLInfra

549

568

549

1300

Rs. -

Buy JsWSteel

1418

1468

1418

500

Rs. -

Buy CoLPaL

872

901

875

600

Rs. 1,800

Buy Vedanta

116

121

123

4000

Rs.28,000

Buy Petronet

276

285

288

3000

Rs.36,000

Total

Rs.65,800.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy IGL

618

604

640

663

Buy PetronetLNG

286

279

297

309

Buy CanaraBnk

202

197

210

219

Buy HDiL

102

99

107

113

Buy NHPC

25

24

27

29

WATCH OUT FOR:

IGL

Sobha

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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