This has been a week of consolidation. The market had a spectacular run since the starting of the month. So now it is taking a much needed rest, by consolidating in the range 6460-6560. A close above the 6560 levels will take the market to higher levels of 6600, whereas a close below 6460 will start correction of the up ove from 5933 to 6574. The potential target of this upward rally will be at 6890 levels with resistance expected around Nifty 6690. So traders and market participants should buy into declines or weakness to get into the market especially the midcap stocks.
Nifty opened the week at 6532, made a high of 6574, low of 6473 and closed the week at 6493. Thus the Nifty closed the week with a minor loss of 11 points. On the daily charts, Nifty have formed a small black body candle, indicating ongoing consolidation. Also on the weekly charts Nifty has formed a small black body candle. This is second small body neutral formation in two weeks. This formation has come on the back of Bullish Three White Soldiers formation. Hence both daily and weekly charts are suggesting consolidation with a bullish bias. The current consolidation will be completed once Nifty closes above 6560. If and when this happens then it will complete a Bullish Flag formation with potential target of 6912. Till then any dips or weakness in the market needs to be bought into, as it is a buy on declines.
The market has left behind a Bullish upward gap (6413-6403). This Bullish Gap is acting as a strong support which got validated two weeks back when the after it was tested with low of 6432. Also this Bullish Gap is a Measuring Gap. As per Gap theory the target falls at Sensex 23101 and Nifty 6886.
When the market overcame the previous top and made fresh lifetime highs, it marked the end of six year consolidation. On the weekly charts Nifty has completed a Bullish Saucer formation. The targets as per this pattern lies at 7454 on the lower side and 8145 on the higher side. The targets are likely to be achieved over a period of next 20 months.
Current rally has started from a low of 5933. Hence it becomes imperative that this support level holds so that the indices can move towards higher targets. Thus a breach of Sensex 19963 and Nifty 5933 will derail the current bullish rally. This week, Nifty managed to remain above the short term average of 20dma (6375), the medium term average of 50dma (6242) and the long term average of 200dma (6013). Thus the trend in the short term, the medium term and the long term timeframe remains bullish.
MACD and ROC are both positive and continue with its Buy signal. RSI @65 suggests that strong bullish momentum is likely to continue. MFI @51 has reduced further but still suggests positive money inflow is greater than negative money flow. Stochastic Oscillator is in Sell mode as %K @79 is below %D. ADX @34 has increased, suggesting that the uptrend is very strong. The Directional Indicators are in a Buy mode as +DI continues to remain above -DI. OBV continues in Buy mode making higher top higher bottom formation. Both the indices continue with Buy signal on Bollinger Band. Thus Oscillators suggests a strong bullish bias in the near term.
The Nifty O.I. PCR is at a level of 1.24 which points towards bullish bias prevailing in the market. For the March series, highest Open interest build up is seen at 6400 Put and 6600 Call. This suggests the market expects a trading range of 6400 and 6600 levels.
Stock of the week:
HDFC
HDFC has been consolidating in the range for past several weeks. After a rally for past four weeks, it has formed a bearish piercing line pattern near the resistance trend line with good amount of volume. Also the monthly, weekly, Daily RSI is below 60, indicating a sell. On weekly charts the RSI has turned downwards after testing the 60 levels. Thus it can be shorted near the levels of 860 with a stoploss of 870 on closing basis and the possible target of 825.55-812.35-800.
Nifty opened the week at 6532, made a high of 6574, low of 6473 and closed the week at 6493. Thus the Nifty closed the week with a minor loss of 11 points. On the daily charts, Nifty have formed a small black body candle, indicating ongoing consolidation. Also on the weekly charts Nifty has formed a small black body candle. This is second small body neutral formation in two weeks. This formation has come on the back of Bullish Three White Soldiers formation. Hence both daily and weekly charts are suggesting consolidation with a bullish bias. The current consolidation will be completed once Nifty closes above 6560. If and when this happens then it will complete a Bullish Flag formation with potential target of 6912. Till then any dips or weakness in the market needs to be bought into, as it is a buy on declines.
The market has left behind a Bullish upward gap (6413-6403). This Bullish Gap is acting as a strong support which got validated two weeks back when the after it was tested with low of 6432. Also this Bullish Gap is a Measuring Gap. As per Gap theory the target falls at Sensex 23101 and Nifty 6886.
When the market overcame the previous top and made fresh lifetime highs, it marked the end of six year consolidation. On the weekly charts Nifty has completed a Bullish Saucer formation. The targets as per this pattern lies at 7454 on the lower side and 8145 on the higher side. The targets are likely to be achieved over a period of next 20 months.
Current rally has started from a low of 5933. Hence it becomes imperative that this support level holds so that the indices can move towards higher targets. Thus a breach of Sensex 19963 and Nifty 5933 will derail the current bullish rally. This week, Nifty managed to remain above the short term average of 20dma (6375), the medium term average of 50dma (6242) and the long term average of 200dma (6013). Thus the trend in the short term, the medium term and the long term timeframe remains bullish.
MACD and ROC are both positive and continue with its Buy signal. RSI @65 suggests that strong bullish momentum is likely to continue. MFI @51 has reduced further but still suggests positive money inflow is greater than negative money flow. Stochastic Oscillator is in Sell mode as %K @79 is below %D. ADX @34 has increased, suggesting that the uptrend is very strong. The Directional Indicators are in a Buy mode as +DI continues to remain above -DI. OBV continues in Buy mode making higher top higher bottom formation. Both the indices continue with Buy signal on Bollinger Band. Thus Oscillators suggests a strong bullish bias in the near term.
The Nifty O.I. PCR is at a level of 1.24 which points towards bullish bias prevailing in the market. For the March series, highest Open interest build up is seen at 6400 Put and 6600 Call. This suggests the market expects a trading range of 6400 and 6600 levels.
Stock of the week:
HDFC
No comments:
Post a Comment