Archives : BULLISH BREAKOUT TO TRADING RANGE - 02/09/2016.

BULLISH BREAKOUT TO TRADING RANGE - 02/09/2016.

LIFE-HIGHS CAN BE TESTED.

After a consolidation of more than six weeks, Market finally managed a bullish breakout of the narrow Trading Range of 250 Nifty points i.e. between 8728-8476. As a result Nifty will move higher to test the Measuring Gap target of 8833 and Flag pattern target of 8869. On the lower side of the Trading Range lies the Bullish Gap between Nifty 8479-8475. This has supported the Nifty six times before staging an upward breakout. Hence as long as this Bullish Gap holds, one can expect not only Measuring Gap target and Flag pattern target but also expect a shot at life time high levels for the indices.


BULLISH BREAKOUT TO TRADING RANGE - 02/09/2016.

LIFE-HIGHS CAN BE TESTED.

After a consolidation of more than six weeks, Market finally managed a bullish breakout of the narrow Trading Range of 250 Nifty points i.e. between 8728-8476. As a result Nifty will move higher to test the Measuring Gap target of 8833 and Flag pattern target of 8869. On the lower side of the Trading Range lies the Bullish Gap between Nifty 8479-8475. This has supported the Nifty six times before staging an upward breakout. Hence as long as this Bullish Gap holds, one can expect not only Measuring Gap target and Flag pattern target but also expect a shot at life time high levels for the indices.

TECHNICALLY SPEAKING.

Sensex opened the week at 27827, made a high of 28581, low of 27698 and closed the week at 28532. Thus it closed the week with a gain of 750 points. At the same time the Nifty opened the week at 8583, made a high of 8824, low of 8543 and closed the week at 8809. Thus the Nifty closed the week with a gain of 237 points.

On the daily charts, both Sensex and Nifty have formed a small white body candle which is in continuation to Upward Trend. On the weekly charts, both the indices have made a big White body candle which has completely removed the bearishness of last three weeks. Thus daily and weekly candlestick study suggests a bullish bias.

Finally after more than six weeks of consolidation, both the indices managed to give a bullish breakout to the narrow trading range between Sensex 28289-27627 and Nifty 8728 – 8476. As a result, one can expect the higher targets to be achieved and also possibly test the life-high levels.

The Bullish Gap between Sensex 27667-27647 and Nifty 8479-8475 has supported the market more than six times and hence as long as this Gap holds, one can expect much higher levels on the indices. Below this Gap, lies a very powerful Bullish Weekly Gap between Sensex 27358-27294 and Nifty 8407-8398. This Weekly Bullish Gap is also a Measuring Gap and the target for which falls at Sensex – 28741 and Nifty – 8833.

Both the indices completed a Bullish Flag pattern and the target for the pattern falls at Sensex – 28859 and Nifty – 8869. Both the targets will be achieved as long as Sensex remains above 27034 and Nifty above 8287.

MACD and Price ROC are both positive and continue in Buy mode. RSI (65) suggests bullish momentum. Stochastic Oscillator %K (88) is above %D and hence continues in Buy mode. ADX has increased to 20 which suggest that Uptrend is now gathering strength. Directional Indicators have given a Buy as +DI has gone above –DI. MFI (50) suggests Positive Money Flow. Bollinger Band has signalled a Buy on Tuesday when price closed above the upper Bollinger Band. Thus Oscillators are suggesting a bullish bias in the near term.

This week, both the indices managed to overcome and close above the short term average of 20dma (Sensex – 28085 and Nifty – 8665). Besides, both the indices continue to remain well above the medium term average of 50dma (Sensex – 27748 and Nifty – 8537) and even the long term average of 200dma (Sensex – 25882 and Nifty – 7910). Thus the trend in the short term time frame has turned upwards, whereas the trend in the medium term and the long term timeframe continues to remain Bullish.

Options data for September series indicate highest Call Open Interest build-up at the strike of 9000 and highest Put build-up at 8600. Thus Options data suggests a trading range with resistance coming in at 9000 and support at 8600.

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy TataChem

565

589

573

1500

Rs. 12,000

Buy OiLIndia

384

397

392

1700

Rs. 13,600

Buy IBulHsg

818

847

845

800

Rs. 21,600

Buy RCom

53

57

55

10000

Rs. 20,000

Buy Uniply

210

231

295

1000

Rs. 85,000

Total

Rs. 1,52,200.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8518

8622

8711

8809

8891

8996

9119

Sensex

27627

27902

28214

28532

28835

29277

29786

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Maruti

5160

5039

5342

5527

Buy IndusIndBk

1192

1167

1230

1270

Buy BharatForge

873

854

902

933

Buy BoB

166

162

172

179

Buy KakatiaCem

391

381

407

425

 WATCH OUT FOR:

BoB

ReL Infra Asc Trian  

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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