Archives : CRITCAL WEEK FOR THE MARKET - 10 03 2017

CRITICAL WEEK FOR THE MARKET - 10/03/2017.


ELECTION RESULTS TO PROVIDE DIRECTION.

For the past three weeks, market has been moving in sideways, narrow trading range of just 200 Nifty points i.e. between 8800 on the lower side and 9000 on the higher side. The answer as to which direction the market takes; will be out when the market opens on Tuesday. The greater probability as the Poll suggests, favours a strong BJP win. In such a scenario, the Nifty will not only close above 8968 but also overcome life time high of 9119 with ease. The other scenario, which is the lesser probability scenario, is a bearish scenario. If that scenario plays out then expect a sharp cut till at least 8800 on the Nifty and a possible small extension of the downward move. In such a case, the sharp decline will not only be short lived but will also provide a buying opportunity.



CRITICAL WEEK FOR THE MARKET - 10/03/2017.


ELECTION RESULTS TO PROVIDE DIRECTION.

For the past three weeks, market has been moving in sideways, narrow trading range of just 200 Nifty points i.e. between 8800 on the lower side and 9000 on the higher side. The answer as to which direction the market takes; will be out when the market opens on Tuesday. The greater probability as the Poll suggests, favours a strong BJP win. In such a scenario, the Nifty will not only close above 8968 but also overcome life time high of 9119 with ease. The other scenario, which is the lesser probability scenario, is a bearish scenario. If that scenario plays out then expect a sharp cut till at least 8800 on the Nifty and a possible small extension of the downward move. In such a case, the sharp decline will not only be short lived but will also provide a buying opportunity.

TECHNICALLY SPEAKING.

Sensex opened the week at 28859, made a high of 29098, low of 28815 and closed the week at 28946. Thus it closed the week with a gain of 114 points. At the same time the Nifty opened the week at 8915, made a high of 8977, low of 8891 and closed the week at 8934. Thus the Nifty closed the week with a gain of 37 points.

On the daily charts, both the indices have formed a small black body Spinning Top. On the weekly charts, both Sensex and Nifty have a small white body candle with small shadows. Thus both daily as well as weekly candlestick formations are neutral and suggest uncertainty in the near term.

This week, once again both the indices crossed the critical level of Sensex 29077 and Nifty 8968 in intraday trading but could not close above these levels. A big bullish pattern Breakout will be confirmed only when both the indices are able to close above these critical breakout levels, which is likely if BJP wins as predicted by the exit Polls. 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.

In case of an adverse result for the BJP, the market will push both the indices down to at least the support levels of Bullish Gap between Sensex 28410-28327 and Nifty 8804-8783. If the correction gets extended then that fall will be a buying opportunity.

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 continues with its Sell signal despite being in positive terrain. Price ROC is positive and continues in Buy mode. RSI (64) suggests bullish momentum. Stochastic Oscillator %K (70) is below %D; hence continues in Sell mode. ADX is at 39 which suggest that the Uptrend is very strong. Directional Indicators continue in Buy mode as +DI remains above –DI. MFI (56) 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 – 28708 and Nifty – 8879), medium term average of 50dma (Sensex – 27912 and Nifty – 8625) and even the long term average of 200dma (Sensex – 27509 and Nifty – 8478). 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 8900. Thus Options data suggests a narrow trading range with resistance coming in at 9000 and support at 8900.

INDEX LEVELS:



 



S3



S2



S1



CLOSE



R1



R2



R3



Nifty



8672



8757



8847



8934



9023



9119



9227



Sensex



27736



28095



28487



28946



29277



29636



30024



 THIS WEEKS RECOMMENDATIONS:



STOCK



CMP



SL



Tgt-1



Tgt-2



Buy BajajAuto



2864



2805



2954



3047



Buy YesBank



1481



1449



1529



1579



Buy L&T



1491



1461



1536



1583



Buy KotakBank



828



811



854



881



Buy KSCL



509



498



526



544


 

WATCH OUT FOR:

 

 

  



 

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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