The Market broke its nine day decline with one hell of a rally on Friday. The loss of nine trading sessions was overcome in just on trading session. This is a clear indication of a Strong Bull market. Nifty as well as BankNifty closed at their life time high levels. Although the global markets were muted, the rally in Indian market is a clear indication of market pricing in a "Abki Bar Modi Sarkar". This weeks IIP and WPI data is not expected to not to jolt the market by much amount. The IndiaVix has shot to a three year high and is expected to move towards the lifetime high. The increased volatility makes the market swing in both directions and hence hedging is important.
Nifty opened the week at 6681, made a high of 6871, low of 6638 and closed the week at 6858. Thus the Nifty closed the week with a gain of 164 points. On Friday Nifty formed a big Opening White body Marubuzo on the daily charts such that the market not only recovered all the losses of the last nine trading sessions but even managed to close at record highs. On weekly charts, it has formed a Bullish Engulfing, but it has little significance as it has not formed in a down trend. Thus both daily as well as weekly charts suggest strong bullish bias in the short term.
On Thursday the daily market report has suggested that, the market has to move below the 6550 mark conclusively to continue its down move. However the market stayed above the crucial support zone reaffirming the the strength of the 6550 level. A breach of this level only will allow the beginning of the correction in the short term.
Nifty had completed a Bullish Flag pattern when it closed above the 6562 level. The pattern has a potential target of at least 6912 and on the higher side 7191. These targets are likely to be achieved as long as Nifty stays above 6432.
The market has a Bullish Upward Gap at 6413-6403. This Bullish Gap has been tested when the markets moved from 6432 to 6869. Thus on any correction this gap will act as strong support. As per the Gap theory this Measuring Gap provides the target of 6886, Which has been more or less been achieved this week. The market has completed a six year consolidation on the monthly charts. The potential target of this pattern at 10480 remains valid till 6350 is not breached conclusively. On the long term investing front the market is buy on dips. This rally started from a low of 5933 and hence this bullish rally remains valid till the market stays above the 5933 levels.
Nifty have closed above the short term average of 20dma (6748), and also continues to remain above the medium term average of 50dma (6591) and the long term average of 200dma (6152). Thus the trend in the short term has turned bullish whereas the trend in the medium term and the long term timeframe continues to remain bullish.
RSI @65 has now gone above the equilibrium line, suggesting bullish momentum. MFI @44 is still below the centerline suggesting negative money flow for the market. Stochastic Oscillator %K 36 has gone above %D, giving a buy signal. ADX @26 suggesting that the uptrend is still intact but had undergone a consolidation. The Directional Indicators have given a fresh Buy signal as +DI has gone above -DI. OBV too has started moving higher but still in sell mode. Thus Oscillators are suggesting a mixed bias in the near term.
Open Interest Put Call Ratio O.I.PCR for the May series is at a reduced level of 0.92. Highest Open interest build up is seen at 7000 Call and 6400 Put. This indicates that the market expects a trading range with support coming in at 6400 levels and resistance around 7000 levels. Friday saw strong Call buying in 7200CE and 7400CE.
Stock of the week:
The stock has closed above its 200 WMA clearly a bullish sign. Also on weekly charts it has given breakout of a Inverted Head & shoulders pattern formed over past one year. The RSI on the weekly charts is also above the 60 level indicating strong bullish trend. The pattern target lies at 290 levels. The Stock can be bought for the stop loss of 193 and for the short term target of 207-215-222.
Nifty opened the week at 6681, made a high of 6871, low of 6638 and closed the week at 6858. Thus the Nifty closed the week with a gain of 164 points. On Friday Nifty formed a big Opening White body Marubuzo on the daily charts such that the market not only recovered all the losses of the last nine trading sessions but even managed to close at record highs. On weekly charts, it has formed a Bullish Engulfing, but it has little significance as it has not formed in a down trend. Thus both daily as well as weekly charts suggest strong bullish bias in the short term.
On Thursday the daily market report has suggested that, the market has to move below the 6550 mark conclusively to continue its down move. However the market stayed above the crucial support zone reaffirming the the strength of the 6550 level. A breach of this level only will allow the beginning of the correction in the short term.
Nifty had completed a Bullish Flag pattern when it closed above the 6562 level. The pattern has a potential target of at least 6912 and on the higher side 7191. These targets are likely to be achieved as long as Nifty stays above 6432.
The market has a Bullish Upward Gap at 6413-6403. This Bullish Gap has been tested when the markets moved from 6432 to 6869. Thus on any correction this gap will act as strong support. As per the Gap theory this Measuring Gap provides the target of 6886, Which has been more or less been achieved this week. The market has completed a six year consolidation on the monthly charts. The potential target of this pattern at 10480 remains valid till 6350 is not breached conclusively. On the long term investing front the market is buy on dips. This rally started from a low of 5933 and hence this bullish rally remains valid till the market stays above the 5933 levels.
Nifty have closed above the short term average of 20dma (6748), and also continues to remain above the medium term average of 50dma (6591) and the long term average of 200dma (6152). Thus the trend in the short term has turned bullish whereas the trend in the medium term and the long term timeframe continues to remain bullish.
RSI @65 has now gone above the equilibrium line, suggesting bullish momentum. MFI @44 is still below the centerline suggesting negative money flow for the market. Stochastic Oscillator %K 36 has gone above %D, giving a buy signal. ADX @26 suggesting that the uptrend is still intact but had undergone a consolidation. The Directional Indicators have given a fresh Buy signal as +DI has gone above -DI. OBV too has started moving higher but still in sell mode. Thus Oscillators are suggesting a mixed bias in the near term.
Open Interest Put Call Ratio O.I.PCR for the May series is at a reduced level of 0.92. Highest Open interest build up is seen at 7000 Call and 6400 Put. This indicates that the market expects a trading range with support coming in at 6400 levels and resistance around 7000 levels. Friday saw strong Call buying in 7200CE and 7400CE.
Stock of the week:
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