The market saw red inspite of the spectacular performance from Infy on the back of the weak global ques. The Infosys result not only beat the street expectations but also gave strong guidenace. The cherry on the top of the cake for the investors came in the form of 1:1 bonus & an interim dividend of Rs. 30. This will definitely raise bar for the expectation from the other IT companies.
Nifty opened the week at 7897, made a high of 7972, low of 7815 and closed the week at 7859. Thus the Nifty closed the week with a loss of 86 points. Nifty has formed a black body Spinning Top on the weekly charts. Last week had similar candlestick pattern and hence next week’s candlestick pattern will be of great significance. A bearish formation next week will signal further downside in the near term. On the daily charts, Nifty has formed Opening White body Marubuzo on Thursday and an big Black body candle on Friday, indicating nullification of the bullishness gained on Thursday. The market is now ready to move lower in the short term.
This week finally the Nifty managed to complete a bearish breakout to the Rising Channel formation formed over last five months. As per this breakout, Nifty is now headed lower towards a potential target of 7381. In the near term, Nifty is correcting the upward rally from an immediate low of 7540 to a high of 8180 and the relevant Correction levels are at 7935-7860-7784.
On the lower side, there exists a critical Bullish Rising gap on the daily charts between 7598-7592 which aided by an intermediate bottom (7540) and 38.2% Retracement of the intermediate rally (7591), forms a strong confluence zone. Thus this confluence zone formed between 7598-7540 will act as Support Zone. The market has already achieved the Rounding bottom target of 8145. Now it is headed towards next target which is Flag pattern target. The target for this pattern is at 8304. The targets will be achieved as long as Nifty remains above 7855.
For the first time since the start of the bullish rally, both the indices have managed to close the week below the medium term average of 50dma (7913) besides continuing to remain lower than the short term average of 20dma (7995). However, both the indices continue to remain well above the long term average of 200dma (7071). Thus the trend in the short and medium term is bearish while that in the long term remains bullish.
RSI @43 continues to remain below the equilibrium line, suggesting bearish momentum. RSI on the weekly charts has gone below the support of 60% for the first time since February 2014. MFI @ 38 continues to remain below the centerline, suggesting money flowing out. ADX has reduced further to 21, suggesting a further decrease in the strength of uptrend. Directional Indicators continue in Sell mode as +DI remains below –DI. OBV is in Sell mode and is making lower top lower bottom formation. Bollinger band continues with its Sell signal given two weeks back. Thus Oscillators are suggesting a bearish bias in the short term.
Option data suggests that highest Put Open Interest build-up is at the strike of 7800 and highest Call build-up is seen at the strike of 8200. Thus Option data suggests short term trading range with support coming in at 7800 and resistance around 8200. On Friday, 7900 Call has seen strong Open Interest buildup which suggests immediate resistance at the level of 7900.
Stock of The week:
HDFC LTD
The Stock has given break down of the head & shoulders pattern on the Daily charts. The pattern target lies at 852 with the stop loss of 1062. For the short term the stock can be shorted with the stop loss of 1040 for the target of 987-967-940.
Nifty opened the week at 7897, made a high of 7972, low of 7815 and closed the week at 7859. Thus the Nifty closed the week with a loss of 86 points. Nifty has formed a black body Spinning Top on the weekly charts. Last week had similar candlestick pattern and hence next week’s candlestick pattern will be of great significance. A bearish formation next week will signal further downside in the near term. On the daily charts, Nifty has formed Opening White body Marubuzo on Thursday and an big Black body candle on Friday, indicating nullification of the bullishness gained on Thursday. The market is now ready to move lower in the short term.
This week finally the Nifty managed to complete a bearish breakout to the Rising Channel formation formed over last five months. As per this breakout, Nifty is now headed lower towards a potential target of 7381. In the near term, Nifty is correcting the upward rally from an immediate low of 7540 to a high of 8180 and the relevant Correction levels are at 7935-7860-7784.
On the lower side, there exists a critical Bullish Rising gap on the daily charts between 7598-7592 which aided by an intermediate bottom (7540) and 38.2% Retracement of the intermediate rally (7591), forms a strong confluence zone. Thus this confluence zone formed between 7598-7540 will act as Support Zone. The market has already achieved the Rounding bottom target of 8145. Now it is headed towards next target which is Flag pattern target. The target for this pattern is at 8304. The targets will be achieved as long as Nifty remains above 7855.
For the first time since the start of the bullish rally, both the indices have managed to close the week below the medium term average of 50dma (7913) besides continuing to remain lower than the short term average of 20dma (7995). However, both the indices continue to remain well above the long term average of 200dma (7071). Thus the trend in the short and medium term is bearish while that in the long term remains bullish.
RSI @43 continues to remain below the equilibrium line, suggesting bearish momentum. RSI on the weekly charts has gone below the support of 60% for the first time since February 2014. MFI @ 38 continues to remain below the centerline, suggesting money flowing out. ADX has reduced further to 21, suggesting a further decrease in the strength of uptrend. Directional Indicators continue in Sell mode as +DI remains below –DI. OBV is in Sell mode and is making lower top lower bottom formation. Bollinger band continues with its Sell signal given two weeks back. Thus Oscillators are suggesting a bearish bias in the short term.
Option data suggests that highest Put Open Interest build-up is at the strike of 7800 and highest Call build-up is seen at the strike of 8200. Thus Option data suggests short term trading range with support coming in at 7800 and resistance around 8200. On Friday, 7900 Call has seen strong Open Interest buildup which suggests immediate resistance at the level of 7900.
Stock of The week:
HDFC LTD
The Stock has given break down of the head & shoulders pattern on the Daily charts. The pattern target lies at 852 with the stop loss of 1062. For the short term the stock can be shorted with the stop loss of 1040 for the target of 987-967-940.
No comments:
Post a Comment