The market stayed in a range for the week. The market makes new high but then stays in range for rest of the week. The expiry also stayed subdued as expected. The government launched its ‘Jan Dhana Yojana’, to open bank account for all people of Bharat. This is a highly ambitious project as it targets unprivilaged people of India. It also helps government with the future goal of direct subsidy transfer. This move will help the PSU bank to improve there CASA and increase their presence in rural areas. Nifty is taking resistance at the upper channel trendline.
Nifty opened the week at 7931, made a high of 7968, low of 7862 and closed the week at 7954. Thus the Nifty closed the week with a gain of 41 points. It was a truncated week and all the four days formed small body candles which don’t have strong trend implications and are very close to neutral formations. But on the weekly chart, a small white body was formed after two strong white body formations in the previous two weeks. This is a Stalled Pattern. It is a bearish reversal pattern which requires confirmation. Thus a real black body candle in the next week can confirm bearish reversal and a weekly close above the patterns high i.e.7968 will negate this formation.
In March this year the market had given a very strong bullish breakout for multiple patterns on multiple timeframes. One of the formations was a Bullish Rounding Bottom on the weekly charts which has a target of 8145. A Flag pattern got completed when Nifty closed above 7922. The target for this pattern is at 8304. The targets will be achieved as long as Nifty remains above 7855.
Both the indices completed a Bullish Island Reversal and thereby generating a Buy signal. The signal will stand negated if Nifty closes below 7540. The market is constantly making higher top higher bottom formations and the short term trend is likely to reverse if the Nifty closes below 7540. A breach of this support is likely to test the Support zone between 7441-7394 which is due to a confluence of the 61.8% correction level with intermittent bottoms at 7441 & 7422.
On a higher scale, a very strong Support zone is formed between 7112-7067. This is a result of confluence of 38.2% Retracement of the higher rally ( 7112), 61.8% Retracement of the immediate rally (7097) and the start of the intermediate Bullish Rising Gap (7067). The long term trend will continue to remain bullish as long as this Support zone is held.
This week, Nifty remains above the short term average of 20dma (7784) as well as the medium term average of 50dma (7694). Both the indices continue to remain well above the long term average of 200dma (6818). Thus the trend in the short term, medium term and long term continues to remain bullish.
RSI has increased to 66, indicating bullish momentum for the market. MACD and Price ROC are both positive and continue with their buy signal. ADX @28 indicates the uptrend is gaining strength. Directional Indicators continue in Buy mode as +DI is above –DI. OBV continues in buy mode making higher top higher bottom formation. MFI has further increased to 79 suggests positive money flow in the market. Thus Oscillators are suggesting a bullish bias for the market.
For the September series, highest Open Interest buildup is seen at the strikes of 7900 and 8100. Highest Put writing is seen at the strike of 7900 and highest Call writing is seen at the strike of 8100. Thus this indicates a trading range for the market with support coming in at 7900 and resistance around 8100.
Stock of the Week:
PVR
The Stock has been consolidating in a range after hitting the high of 705 for the past 60 days. It has given breakout of the symmetrical triangle on the daily charts with good volume. The pattern target lies at 797 with the stop loss of 645. The stock can be bought for the stop loss of 665 with the target of 714-727-745
Nifty opened the week at 7931, made a high of 7968, low of 7862 and closed the week at 7954. Thus the Nifty closed the week with a gain of 41 points. It was a truncated week and all the four days formed small body candles which don’t have strong trend implications and are very close to neutral formations. But on the weekly chart, a small white body was formed after two strong white body formations in the previous two weeks. This is a Stalled Pattern. It is a bearish reversal pattern which requires confirmation. Thus a real black body candle in the next week can confirm bearish reversal and a weekly close above the patterns high i.e.7968 will negate this formation.
In March this year the market had given a very strong bullish breakout for multiple patterns on multiple timeframes. One of the formations was a Bullish Rounding Bottom on the weekly charts which has a target of 8145. A Flag pattern got completed when Nifty closed above 7922. The target for this pattern is at 8304. The targets will be achieved as long as Nifty remains above 7855.
Both the indices completed a Bullish Island Reversal and thereby generating a Buy signal. The signal will stand negated if Nifty closes below 7540. The market is constantly making higher top higher bottom formations and the short term trend is likely to reverse if the Nifty closes below 7540. A breach of this support is likely to test the Support zone between 7441-7394 which is due to a confluence of the 61.8% correction level with intermittent bottoms at 7441 & 7422.
On a higher scale, a very strong Support zone is formed between 7112-7067. This is a result of confluence of 38.2% Retracement of the higher rally ( 7112), 61.8% Retracement of the immediate rally (7097) and the start of the intermediate Bullish Rising Gap (7067). The long term trend will continue to remain bullish as long as this Support zone is held.
This week, Nifty remains above the short term average of 20dma (7784) as well as the medium term average of 50dma (7694). Both the indices continue to remain well above the long term average of 200dma (6818). Thus the trend in the short term, medium term and long term continues to remain bullish.
RSI has increased to 66, indicating bullish momentum for the market. MACD and Price ROC are both positive and continue with their buy signal. ADX @28 indicates the uptrend is gaining strength. Directional Indicators continue in Buy mode as +DI is above –DI. OBV continues in buy mode making higher top higher bottom formation. MFI has further increased to 79 suggests positive money flow in the market. Thus Oscillators are suggesting a bullish bias for the market.
For the September series, highest Open Interest buildup is seen at the strikes of 7900 and 8100. Highest Put writing is seen at the strike of 7900 and highest Call writing is seen at the strike of 8100. Thus this indicates a trading range for the market with support coming in at 7900 and resistance around 8100.
Stock of the Week:
PVR
The Stock has been consolidating in a range after hitting the high of 705 for the past 60 days. It has given breakout of the symmetrical triangle on the daily charts with good volume. The pattern target lies at 797 with the stop loss of 645. The stock can be bought for the stop loss of 665 with the target of 714-727-745
