Archives : MARKET ON COURSE TO MAKE NEW HIGHS - 24/11/2017.

MARKET ON COURSE TO MAKE NEW HIGHS - 24/11/2017.

 

S&P KEEPS INDIA RATING UNCHANGED.

 

Acting in contrast to Moody’s, S&P kept India sovereign rating unchanged with a ‘stable’ outlook. The global ratings agency maintained that growth will remain strong over next two years and the country will maintain sound external accounts position and fiscal deficit will remain broadly in line with expectations. The reason behind not upgrading the ratings was sizeable fiscal deficit, high general government debt and low per capita income. Despite not getting the upgrade, the market will have little to worry as the indices are within striking distance of their life-highs. For three days, the Nifty has taken support at the 20dma and bounced back and as a result the trend continues to remain up. Thus every decline should be treated as a buying opportunity.

 


MARKET ON COURSE TO MAKE NEW HIGHS - 24/11/2017.

 

S&P KEEPS INDIA RATING UNCHANGED.

 

Acting in contrast to Moody’s, S&P kept India sovereign rating unchanged with a ‘stable’ outlook. The global ratings agency maintained that growth will remain strong over next two years and the country will maintain sound external accounts position and fiscal deficit will remain broadly in line with expectations. The reason behind not upgrading the ratings was sizeable fiscal deficit, high general government debt and low per capita income. Despite not getting the upgrade, the market will have little to worry as the indices are within striking distance of their life-highs. For three days, the Nifty has taken support at the 20dma and bounced back and as a result the trend continues to remain up. Thus every decline should be treated as a buying opportunity.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 33365, made a high of 33738, low of 33288 and closed the week at 33679. Thus it closed the week with a gain of 337 points. At the same time the Nifty opened the week at 10287, made a high of 10404, low of 10261 and closed the week at 10389. Thus the Nifty closed the week with a gain of 106 points.

 

On the daily charts, Sensex has formed a Doji whereas Nifty has formed a small white body candle. On the weekly charts, both the indices have formed a Bullish white body candle. Thus candlestick study indicates a bullish bias in the near term.

 

Both the indices had left behind a Bullish Gap last week between 33278-33165 for the Sensex and 10268-10232 for the Nifty. This Bullish Gap will act as Support whenever price tests the above mentioned levels.

 

This week, both the indices took support at the short term average of 20dma (Sensex – 33353 and Nifty – 10324) for three days and bounced back. Both Sensex and Nifty continue to remain above the medium term average of 50dma (Sensex – 32630 and Nifty – 10165) as well as the long term average of 200dma (Sensex – 31063 and Nifty – 9641).  Thus the trend in short term has turned up, whereas the trend in the medium term as well as the long term timeframe continues to remain Bullish.

 

Last week both the indices went lower and took support at the critical Gap formed between Sensex 32804-32670 and Nifty 10120-10104. This gap was ably supported by the previous tops (Sensex – 32683 and Nifty – 10137) along with the 50dma. Sensex made a low of 32683 and Nifty 10094 before staging a bounce-back. Thus any breach of the above mentioned lows will result in the intermediate trend turning down and we will once again resume the Correction; the levels for which are placed at Sensex 32802-32474-32145 and Nifty 10183-10088-9993.

 

The key level to watch out for in this entire upward rally is the support taken at the higher bottom which is at Sensex 31128 and Nifty 9685. A break of this support will interrupt the higher top higher bottom formation sequence for the indices for the first time since December 2016. As a result, we will be looking at the Correction of the entire rally which started from Sensex 25717 and 7896 for the Nifty.

 

On the weekly formation, both the indices had 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 continues in its Sell mode despite being in the positive zone. Price ROC is positive and in Buy mode. RSI (61) suggests bullish momentum. ADX has dropped to 18, which suggests that there is no clear trend. Directional Indicators are in Buy mode. MFI (42) suggests Negative Money Flow. OBV is in Buy mode making higher top higher bottom formation. Thus Oscillators are suggesting a mild positive bias this week.

 

Options data for November series indicate highest Call Open Interest is at the strike of 10500 whereas the highest Put build-up has shifted higher at 10300. Thus Options data suggests a very narrow trading range with resistance at 10500 & support at 10300.


THIS WEEKS RECOMMENDATIONS:


STOCK

CMP

SL

Tgt-1

Tgt-2

Buy M&M

1434

1400

1485

1539

Buy Titan

829

809

859

891

Buy PCJeweller

383

373

398

415

Buy DBL

926

904

961

999

Buy RiiL

573

559

597

625


INDEX LEVELS:


 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

10094

10192

10298

10389

10490

10589

10669

Sensex

32524

32941

33278

33679

33967

34291

34662

 

WATCH OUT FOR:

 

M&M
 
NCC
 
PC Jeweller

 

 

 


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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