Archives : INFY MISSES; MARKET DISAPPOINTED - 15/07/2016.

INFY MISSES; MARKET DISAPPOINTED - 15/07/2016.

INFY CRACKS 10%.

The earnings season started on a disappointing note as IT major Infosys shocked the market. It just about managed to meet street expectations on the net profit front but missed out on the revenue front. But bigger disappointment was lowering of the revenue guidance for the entire year and as a result, Infosys cracked around 10% during the day. The one way Bull Run of last three weeks has come to a halt courtesy Infosys. One can expect a consolidation in the near term before the market takes off to test higher levels, which is positive news for the ongoing Bull market. Strong Support exists between 8407-8398 which is a weekly Bullish Gap.


INFY MISSES; MARKET DISAPPOINTED - 15/07/2016.

INFY CRACKS 10%.

The earnings season started on a disappointing note as IT major Infosys shocked the market. It just about managed to meet street expectations on the net profit front but missed out on the revenue front. But bigger disappointment was lowering of the revenue guidance for the entire year and as a result, Infosys cracked around 10% during the day. The one way Bull Run of last three weeks has come to a halt courtesy Infosys. One can expect a consolidation in the near term before the market takes off to test higher levels, which is positive news for the ongoing Bull market. Strong Support exists between 8407-8398 which is a weekly Bullish Gap.

TECHNICALLY SPEAKING.

Sensex opened the week at 27358, made a high of 28048, low of 27358 and closed the week at 27836. Thus it closed the week with a gain of 710 points. At the same time the Nifty opened the week at 8413, made a high of 8594, low of 8407 and closed the week at 8541. Thus the Nifty closed the week with a gain of 218 points.

On the weekly charts, both Sensex and Nifty have made an Opening White body Marubuzo which is a Bullish pattern. On the daily charts, Sensex has formed a Bearish Engulfing pattern but both candles have smaller bodies; whereas Nifty has formed a Bearish Harami which is a bearish reversal pattern which requires confirmation. Thus a real black body candle on Monday will confirm reversal. Thus daily candlestick analysis suggests a bearish bias in the very short term whereas that is not the case with weekly pattern.

This week opened with a gap up and formed a Bullish Gap (Sensex 27358-27294 and Nifty 8407-8398) on both the indices. Interestingly, Nifty has managed to form this gap on daily as well as weekly chart. Thus this gap will act as strong support. Also this gap can also be classified as a Measuring Gap and the target for which falls at Sensex – 28741 and Nifty – 8833.

Finally the Sensex managed to close above the critical 61.8% Retracement level (27148) of the entire fall from Sensex 30024 to 22494 and Nifty 9119 to 6825. This marks the end of Correction phase and is now signalling a move towards testing life highs of Sensex 30024 and Nifty 9119.

This week both the indices have completed a Bullish Flag pattern and the target for the pattern falls at Sensex – 28859 and Nifty – 8869.

MACD and Price ROC both are positive and continue with their Buy signals. RSI (68) suggests bullish momentum. Stochastic Oscillator %K (95) is in Sell mode as it is below %D. ADX has dropped to 18, which suggests the trend is still in consolidation. Directional Indicators continue in Buy mode as +DI is above –DI. MFI (76) suggests Positive Money Flow. Thus majority of Oscillators are suggesting a bullish bias in the near term.

This week, both the indices continued to remain well above the short term average of 20dma (Sensex – 27104 and Nifty – 8310), medium term average of 50dma (Sensex – 26539 and Nifty – 8134) and even the long term average of 200dma (Sensex – 25647 and Nifty – 7814). Thus the trend in the short term, medium term and the long term timeframe continues to remain Bullish.

Options data for July series indicate highest Call Open Interest build-up has shifted to the strike of 8700 and highest Put build-up has shifted higher at 8400. Thus Option data suggests a small trading range with resistance coming in at 8700 and support at 8400.

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

AjantaPh

1630

1689

1660

400

Rs.12,000

ConCorp

1465

1497

1485

400

Rs. 8,000

Pidilite

729

759

737

1000

Rs. 8,000

ReLInfra

562

583

583

1300

Rs.27,300

Buy BFUtil

568

590

579

1000

Rs.11,000

Total

Rs.66,300.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8212

8308

8413

8541

8654

8749

8844

Sensex

26583

26925

27385

27836

28194

28578

28822

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy HDFCBank

1223

1198

1261

1300

Buy LiCHsg

525

512

545

567

Buy BhartiAir

378

369

392

407

Buy ZeeEnt

471

462

485

500

Buy ALLSecTech

283

275

296

310

WATCH OUT FOR:

Bharti Airtel

Tata Steel

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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