Archives : READY TO TAKE OFF - 05 01 2018

READY TO TAKE OFF - 05/01/2018.

 

FRENZY IN MID-CAP.

 

The dip witnessed on Monday was overcome in the last two days of the week and as a result both Sensex and Nifty managed to close above their previous highs. In the process, a Bullish Flag pattern got completed and the target as per that falls at Sensex 35679 and Nifty 11030. Interestingly, the consolidation of last two months is now complete and we will see strong upward price movement not only in frontline stocks but also the mid-caps and small-caps. As a matter of fact, the frenzy has already begun in mid-caps and small-caps. The focus in the days to come will now shift to budget related stocks.

 


READY TO TAKE OFF - 05/01/2018.

 

FRENZY IN MID-CAP.

 

The dip witnessed on Monday was overcome in the last two days of the week and as a result both Sensex and Nifty managed to close above their previous highs. In the process, a Bullish Flag pattern got completed and the target as per that falls at Sensex 35679 and Nifty 11030. Interestingly, the consolidation of last two months is now complete and we will see strong upward price movement not only in frontline stocks but also the mid-caps and small-caps. As a matter of fact, the frenzy has already begun in mid-caps and small-caps. The focus in the days to come will now shift to budget related stocks.

 

TECHNICALLY SPEAKING.

 

Sensex opened the week at 34059, made a high of 34188, low of 33703 and closed the week at 34153. Thus it closed the week with a gain of 97 points. At the same time the Nifty opened the week at 10531, made a high of 10566, low of 10404 and closed the week at 10558. Thus the Nifty closed the week with a gain of 28 points.

 

On the daily charts, Sensex has formed a big Opening White body Marubuzo whereas Nifty has formed a Real White body candle. Both the candles have formed after a gap up and hence the significance of these candle patterns increases further, thereby making it more bullish. On the weekly charts, both the indices have formed a small white body candle with a longer lower shadow and a negligent upper shadow. It is very similar to a White body Hanging Man but cannot be called so, due to absence of a real white body candle in the previous week. Thus daily as well as weekly candlestick pattern suggests a bullish bias in the near term.

 

On Friday, the indices have left behind a bullish Gap between Sensex 34020-33995 and 10520-10513 on the Nifty. In the near term, this Gap will act as support.

 

On Friday, both the indices overcame their previous highs of Sensex 34137 and Nifty 10552 and as a result a Bullish Flag pattern got completed. The target as per this pattern falls at Sensex 35679 and Nifty 11030. These targets will be achieved as long as Sensex remains above 33703 and Nifty above 10404. On the daily timeframe, both the indices have also 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 35649 and Nifty 11293. On the weekly formation, both the indices had completed a Cup and Handle formation and the targets are Sensex 37554 and Nifty 11413.

 

Last month 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.

 

This week, both the indices continued to stay above the short term average of 20dma (Sensex - 33698 and Nifty - 10412) as well as the medium term average of 50dma (Sensex – 33447 and Nifty – 10339). Both the indices still remain well above the long term average of 200dma (Sensex – 31748 and Nifty – 9851).  Thus the trend in short term as well as medium term timeframe is Upward, whereas the trend in the long term timeframe continues to remain Bullish.

 

MACD and Price ROC are both positive and continue in Buy mode. RSI (63) suggests continuation of Bullish momentum. Stochastic Oscillator %K (88) continues in Buy mode. The bullishness is yet to reflect in ADX as it still suggests consolidation phase. MFI (54) suggests Positive Money Flow. OBV continues in Buy mode making higher top higher bottom formation. Thus Oscillators are suggesting a bullish bias for the near term.

 

Options data for January series indicate highest Call Open Interest is at the strike of 11000 whereas the highest Put build-up has shifted higher at the strike of 10400. Thus Options data suggests a trading range with resistance at 11000 & support at 10400.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

10251

10345

10460

10558

10669

10777

10868

Sensex

33034

33405

33770

34153

34515

34889

35283

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy TideWater

7545

7345

7950

8443

Buy ThirumalaiChem

2249

2191

2342

2444

Buy AutoAxles

1667

1627

1762

1874

Buy BirlaCorp

1244

1214

1293

1347

Buy TataChem

757

741

781

807

 

WATCH OUT FOR:

 

TideWater

 

  

 

 

 

 

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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