Archives : INDECISIVE, UNCERTAIN & VOLATILE - 16/09/2016.

INDECISIVE, UNCERTAIN & VOLATILE - 16/09/2016.

TRENDLINE SUPPORT TO THE RESCUE.

The three words that could aptly describe the market movement of the week gone by are Indecisive, Uncertain and Volatile. Market continues to move in a narrow range of Nifty 8622 on the lower side and 8858 on the higher side. Market is in an indecisive state as it not able to decide which direction it wants to give a breakout. This uncertainty has led to an increase in Volatility. This week the market was ably supported by short term Trendline and the short term Moving Average of 20dma. A break of the trading range on the lower side can lead the market to enter a short term Corrective phase.


INDECISIVE, UNCERTAIN & VOLATILE - 16/09/2016.

TRENDLINE SUPPORT TO THE RESCUE.

The three words that could aptly describe the market movement of the week gone by are Indecisive, Uncertain and Volatile. Market continues to move in a narrow range of Nifty 8622 on the lower side and 8858 on the higher side. Market is in an indecisive state as it not able to decide which direction it wants to give a breakout. This uncertainty has led to an increase in Volatility. This week the market was ably supported by short term Trendline and the short term Moving Average of 20dma. A break of the trading range on the lower side can lead the market to enter a short term Corrective phase.

TECHNICALLY SPEAKING.

Sensex opened the week at 28481, made a high of 28778, low of 28251 and closed the week at 2859. Thus it closed the week with a loss of 198 points. At the same time the Nifty opened the week at 8732, made a high of 8847, low of 8688 and closed the week at 8779. Thus the Nifty closed the week with a loss of 87 points.

On the daily charts, Sensex has formed a small white body candle with a long upper shadow but not long enough for it to be called a Shooting Star and also because it is in the middle of the rally. Nifty has formed a Juji which is a long legged Doji. It is a sign of indecision but long legs are indicative of increase in Volatility. On the weekly charts both Sensex and Nifty have formed a small white body candle. Thus weekly charts are not bearish whereas the daily charts are suggesting indecisiveness and volatility. 

Both the indices took support at the short term Trendline which falls at Sensex – 28237 and Nifty – 8722.

Both the indices continue to trade within the boundaries created by the Gaps on both sides. On the lower side, Bullish Gap between Sensex 28010-27952 and Nifty 8642-8622 continues to act as strong support. Presence of Medium term Average of 50dma in this gap, makes the Support stronger. On the higher side, Bearish Gap between Sensex 28631-28755 and Nifty 8848-8858 continues to act as strong Resistance. If the Upward Bearish Gap is taken out then one can easily expect the indices to reclaim their life-high levels. Whereas if the downside Bullish Gap is breached, then the indices are likely to test the critical Support in the form of another Bullish Gap between Sensex 27667-27647 and Nifty 8479-8475.

MACD is in Sell mode but in positive territory whereas Price ROC is positive and continues in Buy mode. RSI (54) suggests bullish momentum. Stochastic Oscillator %K (48) has just gone above %D giving a fresh Buy signal. ADX has reduced to 20 which suggest that there is no clear trend. Directional Indicators continues in Buy mode as +DI remains above –DI. MFI (64) suggests Positive Money Flow. Thus Oscillators are indicating a mixed picture in the near term.

This week, both the indices tested the short term average of 20dma (Sensex – 28349 and Nifty – 8739) for three days and managed to close the week above it. Both the indices continue to remain above the medium term average of 50dma (Sensex – 28048 and Nifty – 8609) and even the long term average of 200dma (Sensex – 25999 and Nifty – 7938). Thus the trend in the short term has remained bullish, whereas the trend in the medium term and even 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

AuroPharma

802

831

802

700

Rs. -

FiEMInd

1104

1149

1142

500

Rs.19,000

Buy BheL

154

160

154

10000

Rs. -

Buy IDBI

79

83

81

8000

Rs.16,000

JsWEngy

81

85

84

8000

Rs.24,000

Total

Rs.59,000.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8475

8580

8683

8779

8866

8996

9119

Sensex

27385

27854

28214

28599

28978

29448

29844

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Maruti

5573

5452

5755

5940

Buy Glenmark Ph

913

892

945

979

Buy UPL

692

677

715

739

Buy Sintex

82

80

86

91

Buy GNFC

168

164

175

183

WATCH OUT FOR:

Sintex

GNFC

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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