Archives : UP & DOWN, DOWN & UP - 22/08/2008
UP & DOWN, DOWN & UP – 22/08/2008.  

This is the way I would like to describe last week’s movement. Up one day, down another and then up again when not at all expected. The market was very volatile as technically the market was in a short term uptrend and the intermediate trend was down. So when the market broke the trendline support, the momentum on the down side increased. The MACD indicator had given a SELL signal but the crossover of moving averages suggested some upside. On Thursday market broke the critical support levels of 50DMA and closed below that and thus the short term trend turned negative in accordance with the intermediate trend. Hence the confusion that prevailed during the week was a result of the combination of both Buy and Sell signal.

  • SENSEX:
  • NIFTY:
  • HOW TO TRADE?
  • LAST WEEK’S RECOMMEDATIONS:
  • THIS WEEK’S RECOMMENDATIONS:
  • TO READ FULL ARTICLE CLICK MORE
 
UP & DOWN, DOWN & UP – 22/08/2008.  

This is the way I would like to describe last week’s movement. Up one day, down another and then up again when not at all expected. The market was very volatile as technically the market was in a short term uptrend and the intermediate trend was down. So when the market broke the trendline support, the momentum on the down side increased. The MACD indicator had given a SELL signal but the crossover of moving averages suggested some upside. On Thursday market broke the critical support levels of 50DMA and closed below that and thus the short term trend turned negative in accordance with the intermediate trend. Hence the confusion that prevailed during the week was a result of the combination of both Buy and Sell signal.

SENSEX:  

Sensex opened the week at 14681, made a high of 14824, low of 14136 and closed the week at 14401. The weekly loss for the Sensex was 323 points. There was a Bearish Dark Cloud formation on the weekly charts of the Sensex and hence the selling pressure increased during the week.

The MACD indicator has given a Sell signal but is still in the positive. The Rate of Change oscillator has moved in the negative and has given a Sell signal. But the crossover of moving averages suggest that the market may not collapse altogether and may form some sort of bottom probably somewhat higher than 13727. If the market has to again resume its upward move then the level of 13727 will be of great significance and should not be broken.

The Trendline support is at 14225 and 14176. The Trendline Resistance is at 14613. Sensex broke the support offered by 50 DMA on Thursday and closed below that. But on Friday, the market bounced back and closed above the 50 DMA. In such choppiness and uncertainty, traders tend to lose lot of money as stop losses are triggered on either side. So keep your trading positions light.

For the week ahead, the Resistance is at 14568-14746-14888-15130. Support is at 14225-14136-13727.

 NIFTY:

Nifty opened the week at 4430, made a high of 4447, low of 4248 and closed the week at 4327. Thus the weekly loss was 103 points. The MACD indicator and the Rate of Change oscillator are showing Sell signal and suggest some downside. The 50 DMA is at 4280 and will provide support. The level of 4159 assumes significance and should not be broken if the market is to again resume its upward movement. The Trendline Resistance is at 4425 and 4523. The Trendline Support is at 4249 and 4128.

The Open Interest Put Call Ratio is at 1.02, which is slightly lower. It simply suggests that the hedge positions are reduced. The 4400 and 4500 strikes have seen lot of call writing and will provide resistance going ahead.

For the week ahead, the Resistance is at 4369-4425-4523-4587. Support is at 4235-4159-4093.

HOW TO TRADE?

This week it is suggested to construct a Straddle or a Strangle for the Nifty as there is lot of Volatility and uncertainty.

LAST WEEK’S RECOMMEDATIONS:

VOILA !!! Once again we did it against all odds and achieved 100% strike rate inspite of so volatile and uncertain market. All our stocks reached their targets and our readers made huge profits.

  • SELL IDFC 96, Target 91 Reached 90.
  • SELL BOMBAY DYEING 564 Target 535 Reached 523.
  • SELL L&T 2661 Target 2590 Reached 2572.
  • SELL PRAJ 181Target 174 Reached 173.
  • SELL LANCO 311 Target 289 Reached 285.
THIS WEEK’S RECOMMENDATIONS:
  • BUY SAIL 150 SL 147 TGT 156-160.
  • BUY CORE PROJECTS 285 SL 277 TGT 294-305-312.
  • BUY CORROMONDEL FERT 184 SL 176 TGT 195-208.
  • BUY PHOENIX MILLS 184 SL 176 TGT 197-232.
  • BUY GTL INFRA 41 SL 40 TGT 44-46.
  • BUY TORRENT POWER 115 SL 111 TGT 123-129.
  • BUY STERLITE IND 627 SL 607 TGT 651-670.
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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