The movement of rupee was
more critical factor for the economy which fell to Rs 68.84 levels post which
RBI came out with a new measure to stem down rupee movement by opening a forex
swap window to meet the entire daily dollar requirements of three oil
manufacturing companies, IOC, HPCL and BPCL. This helped rupee to appreciate
from high of Rs 68.84 a dollar, to current levels of Rs 66.57 a dollar.
Correction in rupee value, post RBI’s measures and passing of land bill
resulted into improvement in market sentiments which reversed the trend on
bourses. BSE Sensex after touching low of 17443 levels, closed at 18620 on
Friday, while NSE Nifty touched the low of 5119 level and finally settled at
5472. Gold prices have declined to Rs 32,325 per 10 grams, driven by recovery
in rupee amid a weakening global trend. Weakening rupee and concerns on current
deficit kept FIIs outflow upbeat, FIIs sold to the tune of Rs 19.2 bn. DIIs
were also net seller to the tune of Rs 1.4 bn. India GDP for June quarter
reported at 4.4 as compared with 4.8 in March quarter. Brent crude oil slipped
below $115 a barrel on Friday as fears over supply disruptions in the Middle
East eased after Britain said it will not join any military action against
Syria. Consumer comfort in US declined to a more than four-month low.
Sensex
opened the week at 18602, made a high of 18728, low of 17448 and closed the
week at 18619. Thus it registered a weekly gain of 100 points. At the same time
the Nifty opened the week at 5499, made a high of 5528, low of 5118 and closed
the week at 5471. Thus the Nifty was flat for the week with no loss or gains.
Last
week both the indices had formed a Takuri Line formation which failed when both
the indices went below the low of previous week. This week Sensex has formed a small
white body Spinning Top formation with a very long lower shadow, whereas the
Nifty has formed a small black body candle with an equally long lower shadow.
The long lower shadow in both the indices, indicate buying pressure seen at
lower levels. On the weekly chart, both Sensex and Nifty have formed Three
White Soldiers pattern which is a bullish reversal pattern. Hence both daily as
well as weekly charts suggest pull-back in the immediate term.
As
the pull-back continues a strong resistance will be encountered between Sensex 19299
– 19392, which is due to the confluence of an Intermediate Top (19392), 200dma
(19325) and the 61.8% Retracement (19299) of the entire fall.
This
week both Sensex and Nifty managed to come very close to the short term average
of 20dma (Sensex – 18641 and Nifty – 5510) but have closed the week below it.
Also both the indices continue to remain below the long term average of 200dma (Sensex
– 19325 and Nifty – 5836) and the medium term average of 50dma (Sensex – 19152
and Nifty – 5715). Thus the trend in the short term, medium term and long term timeframe
continue to remain bearish.
MACD
has given a fresh Buy signal on Friday in the negative territory. ROC has
improved but still continues with its Sell signal. RSI has moved higher but is
still in Sell mode. Stochastic Oscillator has given a Buy on Thursday as %K (42)
went above %D. MFI (57) has given a Buy signal on Thursday which suggests money
inflow. ADX has improved to around 24 suggesting that the current trend is now
gathering strength. The Directional Indicators continue with its Sell signal as
-DI is above +DI. OBV is moving higher but is still in Sell mode. Bollinger
band also continues with its Sell signal. Interestingly RSI, MFI and Stochastic
Oscillators are showing positive divergences in the very short term timeframe.
The
Nifty O.I. PCR has improved and is now at 1.47. For the current month series, highest
Open interest build up is at 5300 Put and 5500 Call. This suggests that the
market expects a trading range with support at 5300 levels and resistance
around 5500 levels. Friday saw high amount of Put writing at 5300 strike and
Call writing at 5500 strike which suggests the range between Nifty 5300 to Nifty
5500 to hold.
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