The Market is grinding lower and lower each week. New bearish patterns are formed and broken down with lower and lower price targets. The gobal weakness along with lack of new developement policy actions is pulling the market downwards. This Diwali looks poised to be celebratory for the Bears. After the spectacular rally in the first half of the year, the market is now correcting the parabolic up move. This correction is good from long term point Bull market, as it removes the weak hand or excess from the market.
Nifty opened the week at 7831, made a high of 7928, low of 7723 and closed the week at 7779. Thus the Nifty closed the week with a loss of 80 points. The index has formed a black body Spinning Top. This is the third week when a similar formation has been observed but the index is making lower bottoms on weekly basis. On the daily charts, Nifty has formed a small white body candle which is forming a Thrusting pattern on daily charts, which is a bearish continuation pattern. Hence candlestick pattern suggests bearishness in the near term.
Nifty continue its downward journey this week after completing 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. The markets are correcting the upward rally from an intermediate low of 6638 to a high of 8180 and the relevant Correction levels are at 7591-7409-7227.
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.
Nifty continue to remain below the medium term average of 50dma (7917) and the short term average of 20dma (7942). However, it continue to remain well above the long term average of 200dma (7103). Thus the trend in the short and medium term is bearish while that in the long term remains bullish.
RSI @41 continues to remain below the equilibrium line, suggesting bearish momentum. MFI continues to move lower and is at 30, suggesting money flowing out. ADX has reduced to 22, 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 three weeks back. Thus Oscillators are suggesting a bearish bias in the short term.
Option data suggests that highest Put Open Interest build-up has shifted from strike of 7800 to strike of 7700 and highest Call build-up is seen at the strike of 8000. Thus Option data suggests short term trading range with support at 7700 and resistance around 8000. On Friday, 7900 Call has seen strong Open Interest buildup which suggests immediate resistance at the level of 7900.
Stock of the week:
LICHSGFIN
The stock has give breakout of weekly Inverted Head & shoulders pattern. The pattern target lies at 386 with the stop loss of 318. In the short term the stock can be bought with the stop loss of 325 on closing basis for the targets of 341-347-353-359
Nifty opened the week at 7831, made a high of 7928, low of 7723 and closed the week at 7779. Thus the Nifty closed the week with a loss of 80 points. The index has formed a black body Spinning Top. This is the third week when a similar formation has been observed but the index is making lower bottoms on weekly basis. On the daily charts, Nifty has formed a small white body candle which is forming a Thrusting pattern on daily charts, which is a bearish continuation pattern. Hence candlestick pattern suggests bearishness in the near term.
Nifty continue its downward journey this week after completing 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. The markets are correcting the upward rally from an intermediate low of 6638 to a high of 8180 and the relevant Correction levels are at 7591-7409-7227.
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.
Nifty continue to remain below the medium term average of 50dma (7917) and the short term average of 20dma (7942). However, it continue to remain well above the long term average of 200dma (7103). Thus the trend in the short and medium term is bearish while that in the long term remains bullish.
RSI @41 continues to remain below the equilibrium line, suggesting bearish momentum. MFI continues to move lower and is at 30, suggesting money flowing out. ADX has reduced to 22, 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 three weeks back. Thus Oscillators are suggesting a bearish bias in the short term.
Option data suggests that highest Put Open Interest build-up has shifted from strike of 7800 to strike of 7700 and highest Call build-up is seen at the strike of 8000. Thus Option data suggests short term trading range with support at 7700 and resistance around 8000. On Friday, 7900 Call has seen strong Open Interest buildup which suggests immediate resistance at the level of 7900.
Stock of the week:
LICHSGFIN
The stock has give breakout of weekly Inverted Head & shoulders pattern. The pattern target lies at 386 with the stop loss of 318. In the short term the stock can be bought with the stop loss of 325 on closing basis for the targets of 341-347-353-359
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