Archives : X-MAS CHEER FOR THE MARKET - 22/12/2017.

X-MAS CHEER FOR THE MARKET - 22/12/2017.

 

LIFE-HIGHS CONQUERED.

 

The boost received after the BJP win in Gujarat along with strong global markets, propelled the indices to register new life-high levels. After oscillating in a broad band of roughly 500 points for more than 7 weeks, Nifty has finally managed a breakout on Friday and brought Christmas cheer to the market. Finally the consolidation seems to be behind us, as some bullish patterns have been completed on daily as well as weekly chart. As per those patterns, Nifty is headed higher towards target of 10947-11293.

 


X-MAS CHEER FOR THE MARKET - 22/12/2017.

 

LIFE-HIGHS CONQUERED.

 

The boost received after the BJP win in Gujarat along with strong global markets, propelled the indices to register new life-high levels. After oscillating in a broad band of roughly 500 points for more than 7 weeks, Nifty has finally managed a breakout on Friday and brought Christmas cheer to the market. Finally the consolidation seems to be behind us, as some bullish patterns have been completed on daily as well as weekly chart. As per those patterns, Nifty is headed higher towards target of 10947-11293.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 33364, made a high of 33964, low of 32595 and closed the week at 33940. Thus it closed the week with a gain of 478 points. At the same time the Nifty opened the week at 10263, made a high of 10501, low of 10074 and closed the week at 10493. Thus the Nifty closed the week with a gain of 160 points.

 

On the weekly charts, both the indices have formed a big Closing White body Marubuzo. On the daily charts, Sensex has formed a big White body Marubuzo, whereas Nifty has managed a big white body candle. Thus daily as well as weekly candlestick pattern suggests a bullish bias in the near term.

 

As the indices had closed above the critical Trend Reversal level of Sensex 33369 and Nifty 10316, it was expected that the indices will target previous life-high levels. It did happen in the same way as expected and now we are at fresh life-time high levels.

 

In the process of overcoming fresh life-highs, both the indices have completed bullish patterns on daily as well as weekly charts. On the daily timeframe, both the indices have completed a Bullish Saucer formation and the target for that falls at Sensex 35165 and Nifty 10947. On the weekly timeframe, a Bullish Flag pattern has been completed and the target as per that pattern falls at Sensex 33649 and Nifty 11293.

 

Three weeks back the indices suffered a classic Bear trap. It resulted in the indices making an intermediate higher bottom at Sensex 32565 and Nifty 10033. This is the support level from where the market has bounced back. The indices need to sustain above this level for the above mentioned targets to be achieved.

 

On Monday, both the indices tested both short term average of 20dma (Sensex - 33337 and Nifty - 10288) as well as the medium term average of 50dma (Sensex – 33218 and Nifty – 10292), but the market recovered during the day and even closed the week above these averages. Both the indices still remain well above the long term average of 200dma (Sensex – 31538 and Nifty – 9785).  Thus the trend in short term as well as medium term timeframe recovered and remains Upward, whereas the trend in the long term timeframe still continues to remain Bullish.

 

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 and Price ROC continues in Buy mode. RSI suggests continuation of Bullish momentum. Stochastic Oscillator continues in Buy mode. The bullishness is yet to reflect in ADX as it still suggests consolidation phase. MFI (57) suggests Positive Money Flow. OBV is still in Buy mode making higher top higher bottom formation. Thus Oscillators are suggesting a bullish bias for the near term.

 

Options data for December series indicate highest Call Open Interest is at the strike of 10500 whereas the highest Put build-up continues at the strike of 10000. Thus Options data suggests a trading range with resistance at 10500 & support at 10000.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

10178

10270

10383

10493

10589

10693

10778

Sensex

32686

33034

33535

33940

34291

34677

34993

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy MRF

72817

71223

75257

77889

Buy CESC

1049

1026

1084

1121

Buy Voltas

658

643

681

705

Buy DBL

993

972

1025

1059

Buy Navin Fluorine

814

791

849

886

 

WATCH OUT FOR:

 

MRF
 
Alembic

 

 

 

 

 


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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