As expected the markets consolidated this week after the spectacular rally last week. The Friday however saw the Bulls back in action when the market closed at all time high closing. The main action for week was seen in the MidCap & SmallCap Sector stocks. Nifty was up approximately 2% this week bu the midcap index shot up by almost 10% ending the week at lifetime high. The Modi tide lifted all stocks irrespective of their fundamnetals, which is a clear sign of a Bull market.
Nifty opened the week at 7276, made a high of 7381, low of 7193 and closed the week at 7367. Thus the Nifty closed the week with a gain of 164 points. This week the entire action was seen happening within the big candle (7130-7563)of the Election Result Day candle. On the weekly chart, Nifty has formed a white body candle which is within the previous week’s upper shadow. Such a candle formation can be taken as positive formation. Thus daily and weekly candlestick analysis points towards more consolidation with a bullish bias.
Nifty has completed a Bullish Flag pattern on daily charts, which has a target of 7706. Interestingly, it has also completed a Flag pattern on the weekly charts as well and the target as per that is 7705. So the 7700 level is a strong resistance. Market has left behind a Bullish Rising Gap between 7067-7020, which will act as strong support. However a stronger support zone exists between 6665-6650 which has been tested successfully many times before, without getting breached and hence the current uptrend will reverse only if this support zone gets breached.
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 and the targets as per that will fall at 8145. 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 a breach of 5933 will derail the current long term bullish rally.
Nifty is way above the short term average of 20dma (6961), the medium term average of 50dma (6775) and the long term average of 200dma (6214). Thus the trend in the short term, medium term and the long term timeframe continues to remain bullish.
RSI @79 continues to remain overbought since last two weeks. MFI @67 has increased from below suggesting positive money flow for the market. Stochastic Oscillator %K has it has gone above %D giving Buy signal. ADX has increased sharply to 45, suggesting that the Uptrend is now very strong and mature. The Directional Indicators continue with their Buy signal as +DI is well above -DI. OBV continues to move higher making higher tops higher bottoms. Buy signal continues on Bollinger Band since two weeks. Thus Oscillators are suggesting a positive bias in the near term.
Volatility Index India VIX, continued its fall even in the past week. It has gone down from a high level of 39 to a low of 14 before closing the week at 17. The VIX has reached a support area and is likely to witness some sort of pull-back from this level. Nifty Options data suggest high Put writing at the strike of 7000 and strong Call writing at the strike of 7500. Thus one can expect a short term range of the market between Nifty 7000 and 7500.
Stock of The Week:
Jindal Steel & Power Ltd.
As shown in the chart above the stock has given a breakout of an inverted Head & Shoulders pattern on the daily charts. The pattern target lies at 360 with the stop loss of 280. For the short term the stock can be bought with the stop loss of 290 for the target of 315-325-340.
Nifty opened the week at 7276, made a high of 7381, low of 7193 and closed the week at 7367. Thus the Nifty closed the week with a gain of 164 points. This week the entire action was seen happening within the big candle (7130-7563)of the Election Result Day candle. On the weekly chart, Nifty has formed a white body candle which is within the previous week’s upper shadow. Such a candle formation can be taken as positive formation. Thus daily and weekly candlestick analysis points towards more consolidation with a bullish bias.
Nifty has completed a Bullish Flag pattern on daily charts, which has a target of 7706. Interestingly, it has also completed a Flag pattern on the weekly charts as well and the target as per that is 7705. So the 7700 level is a strong resistance. Market has left behind a Bullish Rising Gap between 7067-7020, which will act as strong support. However a stronger support zone exists between 6665-6650 which has been tested successfully many times before, without getting breached and hence the current uptrend will reverse only if this support zone gets breached.
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 and the targets as per that will fall at 8145. 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 a breach of 5933 will derail the current long term bullish rally.
Nifty is way above the short term average of 20dma (6961), the medium term average of 50dma (6775) and the long term average of 200dma (6214). Thus the trend in the short term, medium term and the long term timeframe continues to remain bullish.
RSI @79 continues to remain overbought since last two weeks. MFI @67 has increased from below suggesting positive money flow for the market. Stochastic Oscillator %K has it has gone above %D giving Buy signal. ADX has increased sharply to 45, suggesting that the Uptrend is now very strong and mature. The Directional Indicators continue with their Buy signal as +DI is well above -DI. OBV continues to move higher making higher tops higher bottoms. Buy signal continues on Bollinger Band since two weeks. Thus Oscillators are suggesting a positive bias in the near term.
Volatility Index India VIX, continued its fall even in the past week. It has gone down from a high level of 39 to a low of 14 before closing the week at 17. The VIX has reached a support area and is likely to witness some sort of pull-back from this level. Nifty Options data suggest high Put writing at the strike of 7000 and strong Call writing at the strike of 7500. Thus one can expect a short term range of the market between Nifty 7000 and 7500.
Stock of The Week:
Jindal Steel & Power Ltd.
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