10.06.2019
*AAKASHAYA PATRA WEEKLY MARKET OVERVIEW:*
Even though it was a truncated week, it was a difficult week to
trade as Volatility kept on increasing especially towards the close of the
week. Amidst financial crisis in the NBFC sector and weak global markets, all
hopes were pinned on the RBI Governor to address the NBFC crisis. But the Governor
after giving a 25bps Repo Rate cut, did not address the issue, which led to
Nifty falling by around 200 points. Despite the events of past week, Nifty
remained in a trading range 12103-11614 with a minor increase on the upside. A
downward break will lead the Nifty to test the weekly Bullish Gap
(11591-11426), whereas an upward breakout will lead the Nifty towards Bullish
pattern
target
of 12232.
Technically Speaking :-
Sensex
opened the week at 39806, made a high of 40312, low of 39279 and closed the
week at 39615. Thus it closed the week with a loss of 99 points. At the same time
the Nifty opened the week at 11953, made a high of 12103, low of 11769 and
closed the week at 11870. Thus the Nifty closed the week with a loss of 52
points.On the daily charts, both Sensex and Nifty have formed a small white
body Spinning Top candle
with
a longer lower shadow which suggests buying at lower levels. Along with
previous day's candle, it completed a Bullish Harami. On the weekly charts,
both the indices have formed a small Black body Spinning Top. Thus Candlestick
pattern study suggests a Bullish bias.Both the indices are moving in a Trading
Range defined by the Price range of 23rd May but with a slight improvement on
the upside i.e. between Sensex 40312-38651 and Nifty 12103-11614. A bullish
breakout will see Sensex reaching Cup & Handle target of 41053 and Nifty
12232. A bearish breakout will take the indices to support of Weekly Bullish
Gap.Both the indices have left behind a Bullish Breakaway Gap not only on the
daily time-frame but also on weekly time-frame. This Bullish Gap between Sensex
38570-38001 and Nifty 11591-11426 will now act as strong Support Zone as 20dma
and 50dma also lie inside this Gap.Both the indices had completed a Bullish Cup
& Handle pattern in March 2019 and now they are heading towards their
target of Sensex 41053 and Nifty 12232. Also a Rounding Bottom got completed,
which
has a target of Sensex 44687 & Nifty 13516. Both the indices are above the
short term average of 20dma (Sensex - 38898 and Nifty - 11682) and medium term
average of 50dma (Sensex - 38758 and Nifty 11639). Both the indices continue to
remain above the long term average of 200dma (Sensex - 36853 and Nifty -
11080). Thus the Trend in the long term Timeframe continues to be Bullish,
whereas the Trend in the medium term
as
well as short term Timeframe has turned Bullish.MACD and Price ROC are both
positive and in Buy mode. RSI (55) suggests strong Bullish momentum. Stochastic
Oscillator %K (75) is below %D and hence in Sell mode. ADX (39) suggests Uptrend
still very strong. Directional Indicators are in Buy mode as +DI is above -DI.
MFI (74)
suggests
Positive Money Flow. Thus majority of Oscillators are suggesting a Bullish
bias.
Options
data for June series indicate highest Call Open Interest is at 12500 and the
highest Put build-up is still at the strike of 11500. Thus Options data
suggests a trading range with resistance at 12500 and strong support at 11500.
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