07.04.2019
As
expected the market tested the life-high levels last week and have closed just
below them. Both Sensex and Nifty managed to register new highs but at the same
time both have formed a Weekly Bearish Doji at the top which can have bearish repercussions
in the very short term. The Bearishness will stand negated only if Sensex
closes next week above 39270 and Nifty above 11761. Till then, the market is
likely to experience some turbulence which may result in minor declines. Any
decline will be healthy for the market and any hence any decline should be
treated as a Buying Opportunity.It will be healthy for the Market, if the large
caps or the frontline stocks take a breather and at the same time Mid-caps as
well as Small-caps play catch up. It is time to indulge in stock-picking; time
to be 'Cautiously' Bullish.
TECHNICALLY SPEAKING:-
Sensex
opened the week at 38858, made a high of 39270, low of 38581 and closed the
week at 38862. Thus it closed the week with a gain of 190 points. At the same
time the Nifty opened the week at 11665,made a high of 11761, low of 11559 and
closed the week at 11665. Thus the Nifty closed the week with a gain of 42
points.On the daily charts, both the indices have formed a Bullish Harami.It
will not have very high Bullish implications as it has been formed near the
top. On the weekly charts, both Sensex and Nifty have formed Bearish Doji. A
Bearish Doji can have bearish implications if we get a confirmation in the form
of bearish candle for next week. Interestingly,we had Bearish Doji formation
two weeks back and it got negated the next week when the indices formed a
Closing White body Marubozu. Thus more than daily, weekly candlestick study
suggests a minor Bearish bias in the near term.
When
the indices gave a Bullish breakout for the Trading Range of four months, a
Bullish Cup & Handle pattern got completed. The target for the pattern
falls at Sensex 41053 and Nifty 12232. Both Sensex and Nifty have already
touched life-high levels this week and now are headed for the above mentioned
targets.Market has strong Support at the higher bottom of Sensex 37667 and Nifty
11311 followed by Bullish Gap between Sensex 37230-37106 and Nifty 11227-11180.
Thus this Bullish Gap will act as strong support zone.Also the Gap can be
called as Measuring Gap. The target as per that will be Sensex 39049 &
Nifty 11822.This week, once again both the indices closed above all the Moving Averages
viz. the long term average of 200dma (Sensex - 36364 and Nifty - 10947), the
medium term average of 50dma (Sensex - 36950 and Nifty - 11088) and also the
short term average of 20dma Sensex – 38177 and Nifty - 11467). Thus the Trend in
the long term, medium term and short term Timeframe remains Upwards.MACD as
well as Price ROC are positive and in Buy mode. RSI (67) suggests strong
Bullish momentum.Stochastic Oscillator %K (72) has just gone below %D and hence
in Sell mode. ADX (37) suggests UpTrend getting stronger. Directional Indicators
are in Buy mode as +DI is above -DI. MFI (74) suggests Positive Money Flow. OBV
continues to make higher top higher bottom formation in line with the Bullish
trend.Bollinger Band continues with its Buy signal. Thus Oscillators are
suggesting a Bullish bias.
Options
data for April series indicate highest Call Open Interest is now at the strike
of 12000 whereas the highest Put build-up is at the strike of 11000. Thus
Options data suggests a trading range with resistance at 12000 & support at
11000.
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