14.07.2019
AAKASHAYA PATRA WEEKLY MARKET OVERVIEW:
The disappointment in the Budget was clearly reflected in the Market
movement this week as the indices struggled to move higher. As a result, Nifty
breached the lower end of the trading range and entered the strong Support Zone
of Weekly Bullish Gap 11591-11426. Currently the Nifty has taken support inside
this zone but more precisely at the confluence of 100 dma (11522) and Trendline (11528). This confluence has already come to the rescue for 4
trading days in May and it has done the same this week for 4 days. A bounce can
take the Nifty right upto the Bearish Gap (11771-11797), which will act as
Resistance. A break of the confluence Support can lead the Nifty down to another
Support Zone of 11300-11315.
Technically Speaking :-
Sensex opened the week at 39476, made a high of 39476, low of 38435
and closed the week at 38736. Thus it closed the week with a loss of 777
points. At the same time the Nifty opened the week at 11770, made a high of
11771, low of 11461 and closed the week at 11552. Thus the Nifty closed the week with a loss of 259
points.On the daily charts, both Sensex and Nifty have formed a small black
body candle which is forming a Bearish Engulfing pattern. But Bearish Engulfing
cannot be given significance as both days have small bodies and also the pattern has formed in downtrend.
On the weekly chart, both Sensex and Nifty have formed an Opening Black body Marubozu, which is indicative of the Bearish mood of the market. Thus, weekly
candlestick pattern is showing signs of bearishness over daily candlestick
study.
This week, Nifty opened Gap down and formed a Bearish Gap
11771-11797 on daily as well as weekly charts. Any pull-back will face strong
Resistance at this Bearish Gap. On the other hand, Sensex has not formed any
Bearish Gap on daily or weekly charts.
This week saw the Trading Range being broken on the down side and
the indices entering the strong Support zone formed by the daily as well as
weekly Bullish Gap between Sensex 38570-38001 and Nifty 11591-11426. This Gap
has acted as strong Support as of now. Inside the Gap, a strong Support has
been provided by the confluence of 100 dma (11522) and Trendline (11528) for
last four trading sessions. Thus there is little to worry for the
Bulls as long as the Confluence Support holds.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 closed below the short term average of 20 dma (Sensex - 39268 and Nifty
- 11739) as well as the medium term average of 50dma (Sensex - 39064 and Nifty
- 11708).
Both the indices continue to remain above the long term average of
200dma (Sensex - 37009 and Nifty - 11112). Thus the Trend in the long term
Timeframe continues to be Bullish, whereas the Trend in the short term as well
as medium term Timeframe has turned Bearish.MACD and Price ROC are both
negative and in Sell mode. RSI (40) suggests Bearish momentum.Stochastic
Oscillator %K (16) is above %D and hence in Buy mode. ADX (23) suggests Downtrend
slowly developing. Directional Indicators are in Sell mode as +DI is below -DI.
MFI (65) suggests Positive Money Flow. Thus majority of Oscillators are
suggesting a bearish bias.
Options data for July series indicate highest Call Open Interest
remains at 12000 and the highest Put build-up is shifted to the strike of
11300. Thus Options data suggests a trading range with resistance at 12000 and
strong support at 11300.
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