Archives : MINOR PAUSE @ 9000 - 03/03/2017.

MINOR PAUSE @ 9000 - 03/03/2017.

NIFTY FAILS TO CLOSE ABOVE 8968.

The market continues to display strength even after rallying for more than 1000 Nifty points in just two months. This week the rally continued and the Nifty was within kissing distance of 9000 but Nifty made a weekly high of 8992 before giving away the gains and dropping lower. As the current rally has not seen any major corrections and a failure to close above the critical breakout levels of Sensex 29077 and Nifty 8968, one can expect a small Retracement towards the support of Nifty 8804-8783 and then a possible continuation of the upward journey which will target life time highs.


MINOR PAUSE @ 9000 - 03/03/2017.

NIFTY FAILS TO CLOSE ABOVE 8968.

The market continues to display strength even after rallying for more than 1000 Nifty points in just two months. This week the rally continued and the Nifty was within kissing distance of 9000 but Nifty made a weekly high of 8992 before giving away the gains and dropping lower. As the current rally has not seen any major corrections and a failure to close above the critical breakout levels of Sensex 29077 and Nifty 8968, one can expect a small Retracement towards the support of Nifty 8804-8783 and then a possible continuation of the upward journey which will target life time highs.

TECHNICALLY SPEAKING.

Sensex opened the week at 28910, made a high of 29145, low of 28716 and closed the week at 28832. Thus it closed the week with a loss of 60 points. At the same time the Nifty opened the week at 8943, made a high of 8992, low of 8860 and closed the week at 8897. Thus the Nifty closed the week with a loss of 42 points.

On the daily charts, both the indices have formed a neutral formation; Sensex has formed a Doji whereas Nifty has formed a small white body candle. On the weekly charts, both Sensex and Nifty have formed a small black body Spinning Top which is a neutral formation. Thus daily as well as weekly formations are neutral.

Both the indices crossed the critical level of Sensex 29077 and Nifty 8968 in intraday trading but could not close above these important levels. A big bullish pattern Breakout will be confirmed only when both the indices are able to close above these critical breakout levels. A weekly close above these levels can take the indices higher by at least 10% in the medium term timeframe and thereby easily surpass lifetime high levels.

This week both the indices have returned after testing the critical levels of Sensex 29077 and Nifty 8968. A failure to close above these levels will push the indices down to the support levels of Bullish Gap between Sensex 28410-28327 and Nifty 8804-8783.

Since both the indices are trading over the critical 61.8% Retracement level of Sensex 27994 and Nifty 8558, the long term uptrend has resumed and the indices can be expected to target the previous top.

Both the indices had completed a Bullish Flag pattern which is a Bullish Continuation pattern. The target as per this pattern falls at Sensex 28997-29165 and 9017-9029 for the Nifty. The above targets are likely to be achieved as long as Sensex remains above 27590 and Nifty above 8537.

MACD has given a fresh Sell signal despite being in positive terrain. Price ROC is positive and continues in Buy mode. RSI (64) suggests bullish momentum. Stochastic Oscillator %K (72) is above %D which is indicating a Buy. ADX is at 39 which suggest that the Uptrend is very strong. Directional Indicators continue in Buy mode as +DI remains above –DI. MFI (51) suggests Positive Money Flow. OBV continues in Buy mode and continues to make higher top, higher bottom formation. Bollinger Band continues in Buy mode. Thus majority of Price and Momentum Oscillators are indicating bullishness in the near term. 

This week, both the indices continued to remain above the short term average of 20dma (Sensex – 28548 and Nifty – 8837), medium term average of 50dma (Sensex – 27621 and Nifty – 8530) and even the long term average of 200dma (Sensex – 27422 and Nifty – 8450). Thus the trend in the short term, medium term and even the long term timeframe continues to remain upwards.

Options data for March series indicate highest Call Open Interest build-up at the strike of 9000 and highest Put build-up has shifted higher at 8800. Thus Options data suggests a narrow trading range with resistance coming in at 9000 and support at 8800.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8614

8715

8800

8897

8996

9119

9227

Sensex

27743

28102

28410

28832

29145

29522

29844

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy HeroMoto

3272

3217

3355

3443

Buy JubFood

1056

1034

1089

1123

Buy HUL

877

856

909

942

Buy Hindalco

198

193

206

215

Buy BheL

158

154

164

171

WATCH OUT FOR:

Jubiliant Food

DCB

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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