The markets saw profit booking this week on the back of robust gains in past 2 weeks. On the expiry Nifty closed negative 100 points, its first negative closing since past 5 months. Rollover in the Nifty was on the higher side at around 59.9% whereas the Bank Nifty is on the lower side at 52%.
Nifty opened the week at 7428, made a high of 7504, low of 7118 and closed the week at 7229. Thus the Nifty closed the week with a loss of 138 points. Nifty has completed a black body candle on the weekly chart. In conjunction with the previous weeks candle, a Bearish Engulfing has been completed which is a bearish reversal pattern. Interestingly, both the candles are within the upper shadow of the candle formed three weeks back. On the daily charts, market has formed a small black body candle in line with the downtrend. Thus daily and weekly candlestick analysis suggests a bearish bias in the near term.
Last ten days, the market has spent consolidating inside the Election Day candle (7130-7563) and hence according to Candlestick analysis, these can be termed as Rest days, lacking major directional movement. The low formed at 7130 assume the role of an intermediate support. Only a breach of this support will lead the market to test the strong Support Zone created by the Bullish Rising Gap between 7067-7020.
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 are way above the short term average of 20dma (7102), the medium term average of 50dma (6853) and the long term average of 200dma (6255). Thus the trend in the short term, medium term and the long term timeframe continues to remain bullish.
RSI @63 has come down from overbought levels and is now suggesting bullish momentum. MFI @60 has reduced slightly suggesting positive money flow for the market. Stochastic Oscillator %K has gone below %D, is in Sell mode as it. ADX has increased sharply to 50, 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 has started moving lower and is now making lower top lower bottom formation. Buy signal continues on Bollinger Band for the third week. Thus Oscillators are suggesting a mixed bias in the near term.
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 range of the market between Nifty 7000 and 7500.
Stock of The Week:
Mphasis:
As shown in the figure the stock has broken out of a symmetrical triangle on the weekly charts. The pattern target lies at 535 with the stop loss of 385. For the short term the stock can be bought till 424 with stop loss of 406 for the target of 487-595-509.
Nifty opened the week at 7428, made a high of 7504, low of 7118 and closed the week at 7229. Thus the Nifty closed the week with a loss of 138 points. Nifty has completed a black body candle on the weekly chart. In conjunction with the previous weeks candle, a Bearish Engulfing has been completed which is a bearish reversal pattern. Interestingly, both the candles are within the upper shadow of the candle formed three weeks back. On the daily charts, market has formed a small black body candle in line with the downtrend. Thus daily and weekly candlestick analysis suggests a bearish bias in the near term.
Last ten days, the market has spent consolidating inside the Election Day candle (7130-7563) and hence according to Candlestick analysis, these can be termed as Rest days, lacking major directional movement. The low formed at 7130 assume the role of an intermediate support. Only a breach of this support will lead the market to test the strong Support Zone created by the Bullish Rising Gap between 7067-7020.
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 are way above the short term average of 20dma (7102), the medium term average of 50dma (6853) and the long term average of 200dma (6255). Thus the trend in the short term, medium term and the long term timeframe continues to remain bullish.
RSI @63 has come down from overbought levels and is now suggesting bullish momentum. MFI @60 has reduced slightly suggesting positive money flow for the market. Stochastic Oscillator %K has gone below %D, is in Sell mode as it. ADX has increased sharply to 50, 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 has started moving lower and is now making lower top lower bottom formation. Buy signal continues on Bollinger Band for the third week. Thus Oscillators are suggesting a mixed bias in the near term.
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 range of the market between Nifty 7000 and 7500.
Stock of The Week:
Mphasis:
As shown in the figure the stock has broken out of a symmetrical triangle on the weekly charts. The pattern target lies at 535 with the stop loss of 385. For the short term the stock can be bought till 424 with stop loss of 406 for the target of 487-595-509.
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