AAKASHAYA PATRA EXCLUSIVE STOCK FOR INVESTMENT: 18.10.2020

07.07.2019

AAKASHAYA PATRA WEEKLY MARKET OVERVIEW:

It was Finance Minister Nirmala Sitharaman first Union Budget, and to say that she ticked majority of the boxes and tried

to address key issues would not be wrong. Even though it may not be a visionary Budget but it is certainly accommodative. From the market point of view, addressing the NBFC issue was of paramount importance and a rescue package to that effect was announced." PSU banks gained during the day as Bank Recapitalisation to the extent of Rs. 70,000 crores was announced Proposal to increase Minimum Public Shareholding from 25% to 35% was a big negative for companies with high promoter holding.

Rough estimates suggest that in order to meet the requirement,shares worth Rs.1 Lakh Crores would have to offloaded,which will eventually result in higher LTCG collection. This spooked the market and the market tanked." Fiscal Deficit target of 3.3% of the GDP was an unexpected surprise. The prospects of meeting this target looks very ambitious but the Government claims additional revenue of Rs. 6,000 crores over interim budget estimates will do the needful." Removal of Angel tax, Integration of Aadhar and Pan, Steps to ensure faceless scrutiny, and High Divestment targets were other potential positives from the Budget.

A Budget day is not only a news heavy day but also a highly Volatile day. As a result the market drifted down from the high point, expecting a break in Trading Range 12103-11614. But that was not to be as the Market still continues to remain in that Trading Range. A break on the higher side will lead the Nifty to touch the Cup & Handle target of 12232,whereas a break on the lower side

will lead the Nifty to test the weekly Bullish Gap Support between 11591-11426.

Technically Speaking :-

Sensex opened the week at 39453,made a high of 40032, low of 39441 and closed the week at 39513. Thus it closed the week with a gain of 119 points. At the same time the Nifty opened the week at 11839, made a high of 11981, low of 11797 and closed the week at 11811. Thus the Nifty closed the week with a gain of 23 points.On the daily charts, both Sensex and Nifty have formed a Big Black body candle which overpowers small bullish candles of last four days. On the weekly charts, both the indices have again formed a formation almost like Shooting Star, but it cannot be considered as it has formed in sideways consolidation. Thus weekly Candlestick pattern study suggests a neutral bias whereas daily study indicates bearish bias in the near term.Despite such a news heavy week like the Budget, both the indices still continue their journey inside the previously defined Trading Range between Sensex 40312-38651 & Nifty 12103-11614. In case of a break on the downside, the indices will move towards testing of the

critical Weekly Bullish Gap. A bullish breakout will see Sensex reaching Cup & Handle target of 41053 and Nifty 12232. 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.

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.

This week, both the indices tested and closed below the short term average of 20dma (Sensex -39524 and Nifty - 11828). Both

Sensex and Nifty continue to remain well above the medium term average of 50dma (Sensex - 39090 and Nifty - 11725) as well as above the long term average of 200dma (Sensex - 36982 and Nifty - 11108). Thus the Trend in the medium term and long term Timeframe continues to be Bullish, whereas the Trend in the short term Timeframe has turned Bearish.

MACD and Price ROC are both positive and in Buy mode. RSI (50)suggests Bullish momentum. Stochastic Oscillator %K (78) is below %D and hence in Sell mode. ADX (21) suggests Uptrend losing strength. Directional Indicators are still in Buy mode as +DI is still above -DI. MFI (65) suggests Positive Money Flow. Thus Oscillators are suggesting a mild bullish bias.

Options data for July series indicate highest Call Open Interest is at 12000 and the highest Put build-up is still at the strike of 11500. Thus Options data suggests a trading range with resistance at 12000 and strong support at 11500.