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19.05.2019
AAKASHAYA PATRA WEEKLY MARKET OVERVIEW:

There is macro economic factor in the next week technical analysis will not work in such scenario Nifty made a Bullish Sandwich Pattern, which helped the market reverse some of the losses. Amidst increasing Volatility, both indices took Support at the 100dma for four consecutive days i.e. from Monday to Thursday before bouncing back sharply. Before the D-Day i.e. 23rd May Thursday, Market will react to the Exit Polls on Monday.

POSSIBLE SCENARIOS :-

Scenario I : BJP gets clear majority and the NDA forms Government.

This will be the Most Bullish scenario where Nifty will bounce sharply and overcome strong Resistance
in the form of Bearish Gap at 11657-11699. As a result Nifty will make new high & head towards 12200. The
mid-cap & small-cap stocks will see a sharp rally.

Scenario II : BJP in itself does not get clear majority but NDA forms Government.

In such a case, Nifty will be pushed back to the strong Support zone of 200dma (11040) & 50 WeeksMA
(11030). This Scenario is already factored in the price. This will lead to consolidation with a bullish bias.

Scenario III : BJP led NDA fails to get majority.

Congress along with its Maha-Gathbandhan forms Government. In that case, Nifty will collapse and
possibly take Support at the 100 Weeks MA which is at 10650. Even though this scenario (most bearish)
has lower probability of materialising, it cannot be ruled out.

TECHNICALLY SPEAKING :-

Sensex opened the week at 37419, made a high of 38001, low of 36956 and closed the week at 37930. Thus it closed the week with a gain of 468 points. At the same time the Nifty opened the week at 11258, made a high of 11426, low of 11108 and closed the week at 11407. Thus the Nifty closed the week with a gain of 129 points.

On the daily charts, both Sensex and Nifty have formed Stick Sandwich pattern on Wednesday. On Friday, both the indices have formed a big Opening White body Marubuzo. On the weekly charts, both the indices have formed a real white body candle with a longer lower shadow, which indicates buying at lower levels. Thus candlestick study suggests a Bullish bias.Both Sensex and Nifty are correcting the Upward Rally from Sensex 35287 and Nifty 10585. The relevant Correction levels are placed at Sensex 37883-37387-36891 and Nifty 11371-11221-11071. This
week, both the indices have taken support at 61.8% Retracement level.On the downside, one can expect strong Support coming in at the Support zone formed by the confluence of 200dma and 61.8% Retracement level i.e. between Sensex 36702-36891 and Nifty 11040-11071.Any Upward Rally will run into a strong Resistance Zone which has been created in the form of Bearish Gap between Sensex 37719-38920 and Nifty 11630-11699.Both the indices remained below the short term average of 20dma (Sensex - 38299 and Nifty - 11512) as well as medium term average of 50dma (Sensex - 38158 and Nifty 11467). Both the indices continue to remain above the long term average of 200dma (Sensex - 36702 and Nifty - 11040). Thus the Trend in the long term Timeframe is still Bullish, whereas the Trend in the medium term as well as short term Timeframehas turned Bearish.

MACD and Price ROC are both negative and in Sell mode. RSI (48) suggests Bearish momentum.Stochastic Oscillator %K (24) is above %D and in Buy mode. ADX (32) suggests trend losing strength.Directional Indicators are in Sell mode as +DI is below -DI. MFI (36) suggests Negative Money Flow. OBV is in non-confirmation mode. Thus majority of Oscillators are suggesting a Bearish bias.Volatility Index - India VIX has risen to 28 levels. Before the Results i.e. before Thursday we may see India VIX rising to its target levels of 33 and 39. On Thursday, before the results are out, we will observe Volatility Crunch which will lead to a crash in Volatility and thus Option Premiums.

Options data for May series indicate highest Call Open Interest is at 12000 and the highest Put build-up is still at the strike of 11000. Thus Options data suggests a trading range with resistance coming at 12000 and strong support at
11000.

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