The market has finally cracked this weak. The global markets pulled the index down in spite of strong domestic economic ques. The rupee has finally touched the 61 mark after giving the signal in the start of the June month. The market was making life time highs on the back of narrow market breadth. The market was looking for a reason to correct for past several weeks, and has found it this week in the form of weak global markets.
Nifty opened the week at 7792, made a high of 7799, low of 7593 and closed the week at 7602. Thus the Nifty closed the week with a loss of 188 points. Nifty has formed a black body candle after a gap down opening on Friday. On the weekly chart it has formed a black body Marubuzo which is Engulfing the previous weeks white candle. Thus both daily as well as weekly candlestick pattern suggests bearishness in the near term.
Last week the Bearish Rising Wedge pattern got negated and now the prices are moving in a Rising Channel. A close below 7559 will complete breakdown of the bearish Rising Channel pattern and the target as per that pattern will be at 7044. Market has started correction after registering a high of 7840. The immediate correction levels are placed at 7564-7479-7394. The 61.8% correction level forms a confluence zone with intermittent bottoms at 7441 & 7422. Thus this confluence zone between 7441-7394 will act as strong Support zone for the market.
On a higher scale, a very strong Support zone is formed between 7092-7067. This is a result of confluence of 38.2% Retracement of the higher rally (7092), 61.8% Retracement of the immediate rally (7085) 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 closed below the short term average of 20dma (7670). Nifty is still above the medium term average of 50dma (7574) and the long term average of 200dma (6674). Thus the trend in the short term timeframe has turned down whereas the trend in the medium term and long term timeframe continues to remain up.
RSI @47 has breached the equilibrium line as well as 60% support and has generated a fresh Sell signal. MACD has managed to give a Sell signal despite being in positive territory. Stochastic Oscillator %K @67, continues in Sell mode as it remains below %D. ADX has dropped slightly to 31, which suggests that the prevailing uptrend has still some strength. The Directional Indicators continue in Buy mode as +DI remains above –DI, but they have converged. OBV remains sideways and hence does not confirm to the current upward price movement. Interestingly both RSI and MACD have confirmed negative divergence of the second order. Thus Oscillators are suggesting bearish bias in the near term.
Option writing for the current month series suggests support coming in at 7300 and resistance at 8000. Friday saw strong Call writing at 7700 strike which indicates immediate resistance at that level. On Friday Strong Put writing was seen at 7500 strike indicating a strong support for the week.
Stock of the Week:
HINDUNI (cmp 693)
The Stock has been in a consolidation mode since hitting the high of 725 for past year. It has finally managed to break out in the form of rounding bottom. The pattern target lies at 835 with the stop loss of 610. The stock can be bought with the stop loss of 675 for the target of 716-725-735.
Nifty opened the week at 7792, made a high of 7799, low of 7593 and closed the week at 7602. Thus the Nifty closed the week with a loss of 188 points. Nifty has formed a black body candle after a gap down opening on Friday. On the weekly chart it has formed a black body Marubuzo which is Engulfing the previous weeks white candle. Thus both daily as well as weekly candlestick pattern suggests bearishness in the near term.
Last week the Bearish Rising Wedge pattern got negated and now the prices are moving in a Rising Channel. A close below 7559 will complete breakdown of the bearish Rising Channel pattern and the target as per that pattern will be at 7044. Market has started correction after registering a high of 7840. The immediate correction levels are placed at 7564-7479-7394. The 61.8% correction level forms a confluence zone with intermittent bottoms at 7441 & 7422. Thus this confluence zone between 7441-7394 will act as strong Support zone for the market.
On a higher scale, a very strong Support zone is formed between 7092-7067. This is a result of confluence of 38.2% Retracement of the higher rally (7092), 61.8% Retracement of the immediate rally (7085) 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 closed below the short term average of 20dma (7670). Nifty is still above the medium term average of 50dma (7574) and the long term average of 200dma (6674). Thus the trend in the short term timeframe has turned down whereas the trend in the medium term and long term timeframe continues to remain up.
RSI @47 has breached the equilibrium line as well as 60% support and has generated a fresh Sell signal. MACD has managed to give a Sell signal despite being in positive territory. Stochastic Oscillator %K @67, continues in Sell mode as it remains below %D. ADX has dropped slightly to 31, which suggests that the prevailing uptrend has still some strength. The Directional Indicators continue in Buy mode as +DI remains above –DI, but they have converged. OBV remains sideways and hence does not confirm to the current upward price movement. Interestingly both RSI and MACD have confirmed negative divergence of the second order. Thus Oscillators are suggesting bearish bias in the near term.
Option writing for the current month series suggests support coming in at 7300 and resistance at 8000. Friday saw strong Call writing at 7700 strike which indicates immediate resistance at that level. On Friday Strong Put writing was seen at 7500 strike indicating a strong support for the week.
Stock of the Week:
HINDUNI (cmp 693)
The Stock has been in a consolidation mode since hitting the high of 725 for past year. It has finally managed to break out in the form of rounding bottom. The pattern target lies at 835 with the stop loss of 610. The stock can be bought with the stop loss of 675 for the target of 716-725-735.
First && second target achieved. High of the week resides at 732.
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