The Week can be divided as pre & post RBI action. The markets were pretty much sideways & struggling to cross 8365 till Wednesday when WPI was declared. Based on the inflation data of past several months the RBI governor kept his promise of cutting rates in January 2015. The rate cut of 25bps on the auspicious day of Makar Sankranti was surprise for the market. The market rejoiced this surprise gift and jumped by more than 200 points.
Nifty opened the week at 8291, made a high of 8530, low of 8236 and closed the week at 8513. Thus the Nifty closed the week with a gain of 229 points. On the daily charts, Nifty opened with a gap-up on Thursday and formed a big white body candle followed by a small white body candle on Friday. On the weekly charts it has formed a big white body candle negating the bearishness of the previous weeks black candle. Thus daily as well as weekly candlestick study suggests continuation of bullishness in the near term.
When the market opened with a big gap-up on Thursday, it not only overcame the 61.8% Retracement but also the bearish gap. This signaled the end of correction and start of the prior uptrend. Now the indices are within striking distance of lifetime highs. On the higher side the indices will be targeting the golden ratio target of 8869. The upward Gap (8380-8326) formed on Thursday, will now act as immediate support for the indices. Also both the indices completed a Symmetrical Triangle pattern with potential target 9043.
RSI @62 is well above the centerline suggesting bullish momentum. Stochastic Oscillator continues in Buy mode as %K @83 continues to remain above %D. MFI @72 too has moved higher suggesting positive money flow. ADX remains at low level of 17, indicating lack of strength in the trend. Directional Indicators continue in Buy mode as +DI remains above –DI. OBV has started making higher top higher bottom formation. Bollinger Band has signaled a Buy on Thursday when the indices closed above the upper band. Thus Oscillators are suggesting continuation of bullishness in the near term.
On Thursday, the market managed to close above the medium term average of 50dma @8347. It continues to remain above the short term average of 20dma @ 8284 and also the long term average of 200dma @7731. Thus the trend in the medium term timeframe has turned bullish whereas that in the short term as well as the long term timeframe continue to remain up.
Option data suggest highest Put Open Interest is at 8000 whereas the highest Call build-up has shifted to the strike of 8600. Thus Option data suggests a wide trading range with support coming in at 8000 and resistance around 8600. On Friday, strong Put writing has happened at the strike of 8500, which suggests immediate support at that level.
Stock of the Week:
IDFC
The Stock has been consolidating for the past seven months. It has given breakout of the cup & handle pattern on the daily charts. The pattern target lies at 197 with the stop loss of 153. The stock can be bought with the stop loss of 162 on closing basis for the short term targets of 171.7-175-178.35-180.1
Nifty opened the week at 8291, made a high of 8530, low of 8236 and closed the week at 8513. Thus the Nifty closed the week with a gain of 229 points. On the daily charts, Nifty opened with a gap-up on Thursday and formed a big white body candle followed by a small white body candle on Friday. On the weekly charts it has formed a big white body candle negating the bearishness of the previous weeks black candle. Thus daily as well as weekly candlestick study suggests continuation of bullishness in the near term.
When the market opened with a big gap-up on Thursday, it not only overcame the 61.8% Retracement but also the bearish gap. This signaled the end of correction and start of the prior uptrend. Now the indices are within striking distance of lifetime highs. On the higher side the indices will be targeting the golden ratio target of 8869. The upward Gap (8380-8326) formed on Thursday, will now act as immediate support for the indices. Also both the indices completed a Symmetrical Triangle pattern with potential target 9043.
RSI @62 is well above the centerline suggesting bullish momentum. Stochastic Oscillator continues in Buy mode as %K @83 continues to remain above %D. MFI @72 too has moved higher suggesting positive money flow. ADX remains at low level of 17, indicating lack of strength in the trend. Directional Indicators continue in Buy mode as +DI remains above –DI. OBV has started making higher top higher bottom formation. Bollinger Band has signaled a Buy on Thursday when the indices closed above the upper band. Thus Oscillators are suggesting continuation of bullishness in the near term.
On Thursday, the market managed to close above the medium term average of 50dma @8347. It continues to remain above the short term average of 20dma @ 8284 and also the long term average of 200dma @7731. Thus the trend in the medium term timeframe has turned bullish whereas that in the short term as well as the long term timeframe continue to remain up.
Option data suggest highest Put Open Interest is at 8000 whereas the highest Call build-up has shifted to the strike of 8600. Thus Option data suggests a wide trading range with support coming in at 8000 and resistance around 8600. On Friday, strong Put writing has happened at the strike of 8500, which suggests immediate support at that level.
Stock of the Week:
IDFC
The Stock has been consolidating for the past seven months. It has given breakout of the cup & handle pattern on the daily charts. The pattern target lies at 197 with the stop loss of 153. The stock can be bought with the stop loss of 162 on closing basis for the short term targets of 171.7-175-178.35-180.1
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