The market has been playing sea-saw for past couple of weeks. It shows signs of weakness and then bounces back sharply & vice-verse. The sheer volatility is making or breaking the trades. After closing above the 8372 the market was looking bullish but post the global turmoil it plunged by 3% to 8065. However it recovered equally sharply to close the week at 8264.
Nifty opened the week at 8407, made a high of 8445, low of 8065 and closed the week at 8284. Thus the Nifty closed the week with a loss of 174 points. On the daily charts, Nifty has formed a Dragonfly Doji with long lower shadows. On the weekly chart it has formed a black body candle with a long lower shadow which indicates presence of support at lower level. Thus daily as well as weekly candlestick study suggests mild consolidation with no clear direction.
When the market fell on Tuesday Nifty created a Bearish Gap between 8327-8363. Along with this gap, the 50dma and 61.8% Retracement level of the fall make for a strong confluence zone for the market. Thus 8327-8372 will act as a strong Resistance zone. When the market went down this week, the demand Trendline which had acted as a support to the market previously, once again came to the rescue. Thus if this trendline gets taken out then it will lead to a strong medium term bearish pattern completion. Hence Trendline Support at 8069 need to hold for the uptrend to continue.
Nifty opened the week at 8407, made a high of 8445, low of 8065 and closed the week at 8284. Thus the Nifty closed the week with a loss of 174 points. On the daily charts, Nifty has formed a Dragonfly Doji with long lower shadows. On the weekly chart it has formed a black body candle with a long lower shadow which indicates presence of support at lower level. Thus daily as well as weekly candlestick study suggests mild consolidation with no clear direction.
When the market fell on Tuesday Nifty created a Bearish Gap between 8327-8363. Along with this gap, the 50dma and 61.8% Retracement level of the fall make for a strong confluence zone for the market. Thus 8327-8372 will act as a strong Resistance zone. When the market went down this week, the demand Trendline which had acted as a support to the market previously, once again came to the rescue. Thus if this trendline gets taken out then it will lead to a strong medium term bearish pattern completion. Hence Trendline Support at 8069 need to hold for the uptrend to continue.
On Friday, the market managed to close above the short term average of 20dma (8223) but failed to conquer the medium term average of 50dma (8334). Also both the indices continue to remain well above the long term average of 200dma (7684). Thus the trend in the short term timeframe has turned bullish whereas that in the medium term timeframe continues to remain down. However the trend in the long term timeframe continues to remain up.
RSI has given a fresh buy by going above the centerline suggesting
bullish momentum. Price ROC remains negative and thus in Sell mode.
Stochastic Oscillator continues in Sell mode as %K @37 continues to
remain below %D. MFI @62 too has moved higher suggesting positive money
flow. ADX has fallen to a level of 18 suggesting that the market is
trendless. OBV too continues to remain sideways. Thus Oscillators are
giving mixed signals and hence expect uncertainty in the next week.
This week the Volatility Index struck as it increased more than 30% during the week. If India VIX closes above 19, then the first target for India VIX will be 29. Option data suggest highest Put Open Interest is at 8000 whereas the highest Call build-up has shifted to the strike of 8400. Thus Option data suggests a trading range with support coming in at 8000 and resistance around 8400.
Stock of the Week:
Tech Mahindra
The Stock has given breakout of Inverted Head & shoulders pattern on the daily charts with good volume. The pattern target lies at 2810 with the stop loss of 2550. The RSI has also moved above the 60% level indicating bullishness. The stock can be bought at cmp & on fall till 2600 with the stop loss of 2550 for the target of 2733-2775-2810
I got to learn very useful information from trading point of view here. To sustain in market with long term profitability always use highly accurate stock futures tips while trading .
ReplyDelete