As expected the markets bounced nicely from the intermediate support of 6650. The IT companies posted better the expected results, which helped for fast market recovery. The market is giving sharp action and reactions which many a times causes confusion in traders mind.
Nifty opened the week at 6792, made a high of 6813, low of 6665 and closed the week at 6779. Thus the Nifty closed the week with a minor gain of just 3 points. On the daily charts Nifty have formed a big white body candle white body Marubuzo. The thursday's action alone was sufficient to erase the big losses of past 2 days.On the weekly charts, Nifty has formed a small spinning top black body candle with long lower shadow and small upper shadow. The long lower shadow indicates buying witnessed at lower levels. Thus both daily as well as weekly charts suggest continuation of bullishness.
This weeks market action has resulted in formation of a strong Support Zone between 6665-6650. If and when this support zone is taken out the actual correction will start for the move from 5933 to 6819. The corresponding support levels as per Fibonacci retracements are at 6480-6376-6271.
The index has formed various patterns during its up move, with each pattern providing different targets. The Bullish Flag pattern completed when Nifty closed above 6560 has a pattern target of at 6910. This pattern remains valid till Nifty is trading above 6432. The Rising Wedge formation in weekly line chart, has given a bullish breakout, which indicated strong upmove towards 7326 levels. On monthly charts the markets has broken out of six year consolidation in the form of Ascending triangle. The target for this stays at minimum of 10480 levels
The market has left behind a Bullish Upward Gap at 6413-6403 levels. This Bullish Gap is a Measuring Gap and as per Gap theory the target falls at 6880. Current rally has started from a low of 5933. Thus a breach of Sensex 19963 and Nifty 5933 will derail the current bullish rally.
This week,Nifty managed to take support and bounce back from the short term average of 20dma at 6672. Nifty continues to remain above the medium term average of 50dma (6413) and the long term average of 200dma (6096). Thus the trend in the short term, medium term and the long term time frame continues to remain bullish.
RSI @65 suggests Bullish momentum. MFI @57 has dropped lower but still suggests money in-flow for the market. Stochastic Oscillator is in Sell mode as %K it has moved below %D. ADX @40 has reduced slightly but the uptrend remains very strong. The Directional Indicators continue in Buy mode as +DI continues to remain above -DI. OBV continues in Buy mode making higher top higher bottom formation. The index continues with their Buy signal on Bollinger Band. Majority of the Oscillators still suggests bullish bias and hence investors should use every dip as buying opportunity.
The OI (Open Interest) Put Call Ratio O.I.PCR for the current month is at a level of 1.40 which indicates a bullish bias. Highest Open interest build up is seen at 6700 Put and 6800 Call. This suggests that the market expects a small trading range with support at 6700 levels and resistance around 6800 levels.
Stock of The Week:
Muthoot Finance:
The stock has been moving in a range for past 2 months. The stock has given breakout of the falling channel with heavy volumes. The stock can be bought at 178 and on declines till 175 with the stop loss below 170 levels and for the targets of 184-190-196-201.
Nifty opened the week at 6792, made a high of 6813, low of 6665 and closed the week at 6779. Thus the Nifty closed the week with a minor gain of just 3 points. On the daily charts Nifty have formed a big white body candle white body Marubuzo. The thursday's action alone was sufficient to erase the big losses of past 2 days.On the weekly charts, Nifty has formed a small spinning top black body candle with long lower shadow and small upper shadow. The long lower shadow indicates buying witnessed at lower levels. Thus both daily as well as weekly charts suggest continuation of bullishness.
This weeks market action has resulted in formation of a strong Support Zone between 6665-6650. If and when this support zone is taken out the actual correction will start for the move from 5933 to 6819. The corresponding support levels as per Fibonacci retracements are at 6480-6376-6271.
The index has formed various patterns during its up move, with each pattern providing different targets. The Bullish Flag pattern completed when Nifty closed above 6560 has a pattern target of at 6910. This pattern remains valid till Nifty is trading above 6432. The Rising Wedge formation in weekly line chart, has given a bullish breakout, which indicated strong upmove towards 7326 levels. On monthly charts the markets has broken out of six year consolidation in the form of Ascending triangle. The target for this stays at minimum of 10480 levels
The market has left behind a Bullish Upward Gap at 6413-6403 levels. This Bullish Gap is a Measuring Gap and as per Gap theory the target falls at 6880. Current rally has started from a low of 5933. Thus a breach of Sensex 19963 and Nifty 5933 will derail the current bullish rally.
This week,Nifty managed to take support and bounce back from the short term average of 20dma at 6672. Nifty continues to remain above the medium term average of 50dma (6413) and the long term average of 200dma (6096). Thus the trend in the short term, medium term and the long term time frame continues to remain bullish.
RSI @65 suggests Bullish momentum. MFI @57 has dropped lower but still suggests money in-flow for the market. Stochastic Oscillator is in Sell mode as %K it has moved below %D. ADX @40 has reduced slightly but the uptrend remains very strong. The Directional Indicators continue in Buy mode as +DI continues to remain above -DI. OBV continues in Buy mode making higher top higher bottom formation. The index continues with their Buy signal on Bollinger Band. Majority of the Oscillators still suggests bullish bias and hence investors should use every dip as buying opportunity.
The OI (Open Interest) Put Call Ratio O.I.PCR for the current month is at a level of 1.40 which indicates a bullish bias. Highest Open interest build up is seen at 6700 Put and 6800 Call. This suggests that the market expects a small trading range with support at 6700 levels and resistance around 6800 levels.
Stock of The Week:
Muthoot Finance:
The stock has been moving in a range for past 2 months. The stock has given breakout of the falling channel with heavy volumes. The stock can be bought at 178 and on declines till 175 with the stop loss below 170 levels and for the targets of 184-190-196-201.
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