The market finally went above the resistance of the rising channel and broke out of the range. It has completed the Rounding bottom target of 8145 this week. Nifty took resistance and closed the week below 8100. Till now the mid-cap & samall-cap stocks were on sidelines, but now they have also jumped on the dance floor to rock & roll. The mid-cap index went up by more than 4% this week but still has a lot of catching up to do; thus promising an interesting next week.
Nifty opened the week at 7990, made a high of 8141, low of 7984 and closed the week at 8086. Thus the Nifty closed the week with a gain of 132 points. The Stalled/Deliberation pattern formed last week required a confirmation this week, in the form a bearish candle; which did not materialize. This week's candle is a Bullish Opening White body Marubuzo which suggests bullishness. Whereas on the daily charts, last three days formed small black body candles almost like neutral formations. Thus candlestick analysis suggests bullishness to continue in the near term.
This week the market opened with a gap up above the crucial resistance of 8070 on Monday and that gap sustained throughout the week resulting in a weekly gap. Thus this gap between 7984-7968 will not only act as a strong support but it is also a Measuring gap. Thus, according to Gap theory, the immediate target for the current rally falls at 8412. A weekly close below 7968 will reverse the short term trend.
The market is constantly making higher top higher bottom formations and the medium 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.
This week the market achieved the Rounding bottom target of 8145. Now it is headed towards next target which is Flag pattern target, which got completed when the Nifty closed above 7922. The target for this pattern is at 8304. The targets will be achieved as long as Nifty remains above 7855.
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 is comfortably above the short term average of 20dma (7883) as well as the medium term average of 50dma (7748). Both the indices continue to remain well above the long term average of 200dma (6869). Thus the trend in the short term, medium term and long term continues to remain bullish.
RSI @70 has increased, indicating it is just beginning to get overbought. ADX has increased further to 34 indicating that the uptrend is getting stronger. Directional Indicators continue in Buy mode as +DI is above –DI. OBV continues in buy mode making higher top higher bottom formation. MFI@68 has fallen after being overbought and is suggesting positive money flow in the market. Thus Oscillators are suggesting a bullish bias for the market.
Option data suggests that highest Put Open Interest build-up is at the strike of 8000 and highest Call build-up is at the strike of 8200. Thus Option data analysis indicates a short term trading range with support coming in at 8000 and resistance around 8200. Friday saw heavy Call writing at the strike of 8200 which indicates that the Nifty will find difficulty in surpassing the level of 8200.
Stock of the Week:
Wipro:
The Stock has given a breakout of Inverted Head & shoulders pattern on the weekly charts on strong volumes. The breakout has occurred after 9 weeks of consolidation. The RSI @80% is also above the bullish 60% level. The pattern target lies at 687.5 with the stop loss of 536. All dips towards the 570 level should be bought into. For the short term the stock can be bought for the targets of 593.5-609-635 with the stop loss of 561 on closing basis.
Nifty opened the week at 7990, made a high of 8141, low of 7984 and closed the week at 8086. Thus the Nifty closed the week with a gain of 132 points. The Stalled/Deliberation pattern formed last week required a confirmation this week, in the form a bearish candle; which did not materialize. This week's candle is a Bullish Opening White body Marubuzo which suggests bullishness. Whereas on the daily charts, last three days formed small black body candles almost like neutral formations. Thus candlestick analysis suggests bullishness to continue in the near term.
This week the market opened with a gap up above the crucial resistance of 8070 on Monday and that gap sustained throughout the week resulting in a weekly gap. Thus this gap between 7984-7968 will not only act as a strong support but it is also a Measuring gap. Thus, according to Gap theory, the immediate target for the current rally falls at 8412. A weekly close below 7968 will reverse the short term trend.
The market is constantly making higher top higher bottom formations and the medium 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.
This week the market achieved the Rounding bottom target of 8145. Now it is headed towards next target which is Flag pattern target, which got completed when the Nifty closed above 7922. The target for this pattern is at 8304. The targets will be achieved as long as Nifty remains above 7855.
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 is comfortably above the short term average of 20dma (7883) as well as the medium term average of 50dma (7748). Both the indices continue to remain well above the long term average of 200dma (6869). Thus the trend in the short term, medium term and long term continues to remain bullish.
RSI @70 has increased, indicating it is just beginning to get overbought. ADX has increased further to 34 indicating that the uptrend is getting stronger. Directional Indicators continue in Buy mode as +DI is above –DI. OBV continues in buy mode making higher top higher bottom formation. MFI@68 has fallen after being overbought and is suggesting positive money flow in the market. Thus Oscillators are suggesting a bullish bias for the market.
Option data suggests that highest Put Open Interest build-up is at the strike of 8000 and highest Call build-up is at the strike of 8200. Thus Option data analysis indicates a short term trading range with support coming in at 8000 and resistance around 8200. Friday saw heavy Call writing at the strike of 8200 which indicates that the Nifty will find difficulty in surpassing the level of 8200.
Stock of the Week:
Wipro:
The Stock has given a breakout of Inverted Head & shoulders pattern on the weekly charts on strong volumes. The breakout has occurred after 9 weeks of consolidation. The RSI @80% is also above the bullish 60% level. The pattern target lies at 687.5 with the stop loss of 536. All dips towards the 570 level should be bought into. For the short term the stock can be bought for the targets of 593.5-609-635 with the stop loss of 561 on closing basis.
Target 1 achieved high of 595 on 8th Sept
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