Archives : SHORT TERM TREND REMAINS DOWN - 21/04/2017.

SHORT TERM TREND REMAINS DOWN - 21/04/2017.

 

WEEKLY GAP TO THE RESCUE.

 

As expected the market is not able to sustain higher levels and the downward push took the indices towards the support of strong Weekly Gap (Sensex 29356-29098 and Nifty 9060-8977). This week the indices have managed to bounce back from these support levels, but any close below this gap will turn the Medium term Trend to bearish. Also the Short term Trend continues to remain down. This consolidation augurs well for the market as it will not only make the market healthier but also ready to strike higher levels.

 



SHORT TERM TREND REMAINS DOWN - 21/04/2017.

 

WEEKLY GAP TO THE RESCUE.

 

As expected the market is not able to sustain higher levels and the downward push took the indices towards the support of strong Weekly Gap (Sensex 29356-29098 and Nifty 9060-8977). This week the indices have managed to bounce back from these support levels, but any close below this gap will turn the Medium term Trend to bearish. Also the Short term Trend continues to remain down. This consolidation augurs well for the market as it will not only make the market healthier but also ready to strike higher levels.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 29470, made a high of 29701, low of 29241 and closed the week at 29365. Thus it closed the week with a loss of 96 points. At the same time the Nifty opened the week at 9144, made a high of 9217, low of 9075 and closed the week at 9119. Thus the Nifty closed the week with a loss of 31 points.

 

On the daily charts, both the indices have made a real black body candle with a longer lower shadow. On the weekly charts, both Sensex and Nifty have formed a small black body candle Spinning Top. This is a neutral formation which can turn into bullish reversal on getting a confirmation in the form of next week’s bullish candle. Thus daily candlestick study indicates a bearish bias whereas weekly study is neutral.

 

This week, the market experienced a downward push which took the indices to test the strong support in the form of the weekly gap i.e. between Sensex 29356-29098 and Nifty 9060-8977. This gap provided support and the indices managed a slight recovery. A break of this support will turn the medium term trend to bearish. Besides acting as a support, this gap also acts as a Measuring Gap. The target as per Gap theory falls at Sensex 32737 and Nifty 10144.

 

When the indices closed above Sensex 29077 and Nifty 8968, both Sensex and Nifty completed a Saucer formation on the daily charts. The target as per this pattern falls at Sensex 31153-32437 and Nifty 9630-10043. On the weekly formation, both the indices completed a Cup and Handle formation and the targets are Sensex 34677-37554 and Nifty 10536-11413.

 

If one considers the Cup and Handle formation of 7 years from 2007 to 2014, the target for that pattern falls at Sensex 34715 and Nifty 10462. The Golden Ratio target of the current pattern weekly pattern of 2 years is at Sensex 34677 and Nifty 10536. Thus in the medium term one can expect a test of the above targets i.e. Sensex 34677-34715 and Nifty 10462-10536.

 

MACD despite being in positive zone continues with its Sell signal. Price ROC is in negative zone and hence in Sell mode. RSI (51) still suggests slight Bullish momentum. Stochastic Oscillator %K (22) continues in Sell mode. ADX is at 33 which suggest that the Uptrend is still intact. Directional Indicators continue in Buy mode as +DI remains above –DI. MFI (43) suggests Negative Money Flow. OBV has started making lower top lower bottom formations. Buy signal in Bollinger Band got negated last week. Besides, Oscillators like MACD, RSI and OBV are showing negative divergence of the first order. Thus Oscillators are painting a mixed picture with slight negative bias.

 

This week, both the indices tested the short term average of 20dma (Sensex – 29552 and Nifty – 9158) and closed below it. Both the indices continue to remain above the medium term average of 50dma (Sensex – 29128 and Nifty – 9016) and even the long term average of 200dma (Sensex – 27903 and Nifty – 8612). Thus the trend in the short term remains down whereas the trend in the medium term and the long term timeframe continues to remain bullish.

 

Options data for April series indicate highest Call Open Interest build-up has shifted further lower at the strike of 9200 and highest Put build-up remains at 9000. Thus Options data suggests a trading range with resistance coming in at 9200 and support at 9000.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8804

8914

9019

9119

9218

9339

9444

Sensex

28410

28716

29065

29365

29705

30024

30389

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy PEL

2351

2293

2439

2528

Buy HDFCBank

1496

1467

1540

1585

Buy CoLPaL

1032

1008

1068

1107

Buy CanaraBank

323

315

335

348

Buy JainIrrig

111

108

116

122

 

WATCH OUT FOR:

 

Canara Bank
 

 

HDiL

 

 

 

 

 

 


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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