28.07.2019
AAKASHAYA PATRA WEEKLY MARKET OVERVIEW:
After six days of turmoil inflicted by the Bears, finally the Bulls heaved
a sigh of relief on Friday as the Market managed a positive close. After such a
one way fall where Support levels were taken out with ease, expecting a token
bounce-back is not surprising.But the key question remains whether we will see a Reversal or
whether the Bounce-back will continue any further. The answer to the first
question is we don't see any signs of Reversal as yet, whereas the answer to
the second is we can expect the Pull-back to continue for few more days. Any
Pull-back upto 11590 levels can be treated as a good opportunity to lighten
stuck-up long positions. Only a close above 11797 will confirm a Reversal, till
then all rallies will be sold into.
Technically Speaking :-
Sensex opened the week at 38333, made a high of 38333, low of 37690
and closed the week at 37882. Thus it closed the week with a loss of 455
points. At the same time the Nifty opened the week at 11392, made a high of
11398, low of 11210 and closed the week at 11284. Thus the Nifty closed the week with a loss of 135
points.
On the daily charts, both Sensex and Nifty have formed a small white
body Spinning Top; also Sensex is completing a Bullish Harami. On the weekly
chart, both Sensex and Nifty have formed an Opening Black body Marubuzo but
with a comparatively smaller body. Thus, daily candlesticks are suggesting
mildly bullish bias whereas weekly candlestick pattern is suggesting a bearish bias in the near term.A break of the strong Weekly Gap Support and
Trendline Support saw the indices collapsing this week. Sensex has taken
Support at 37690 and Nifty at 11210 before staging a minor bounceback this
Friday. If the above mentioned lows are taken out then we will be staring at
the strong Support of 200dma (Sensex - 37111 and Nifty 11135).
This week saw addition in Weekly Gap Resistance in Nifty as the
Bearish Gap 11398-11399 formed on Monday remained unfilled throughout the week,
resulting in formation of another Weekly Bearish Gap. Thus any Pull-Back by the
Market will see the above mentioned Weekly Gap acting as strong Resistance.
Besides Nifty has one more Weekly Bearish Gap 11771-11797 going upwards which will act as stronger Resistance. Interestingly Sensex does not
have the above mentioned Gaps.Only a close above the upper Weekly Bearish Gap
11771-11797 will signal a Reversal in Bearishness; till then any pull-back will
be treated as Selling opportunity by the Market.
Both the indices had completed a Bullish Cup & Handle pattern in
March 2019 which is still not negated, and has its Target at 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 20dma (Sensex - 38819 and Nifty - 11581) as well as the medium term
average of 50dma (Sensex - 39194 and Nifty - 11726).Both the indices continue
to remain above the long term average of 200dma (Sensex - 37111 and Nifty -
11135). 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 remains
Bearish.
MACD and Price ROC are both negative and in Sell mode. RSI (33)
suggests Bearish momentum. Stochastic Oscillator %K (07) is just above %D and
hence is giving Buy signal. ADX (28) suggests Downtrend getting stronger.
Directional Indicators are in Sell mode as +DI is below -DI.MFI (33) suggests
Negative Money Flow. Bollinger Band continues with its Sell signal given in previous
week. Thus majority of Oscillators are suggesting a bearish bias.
Options data for August series indicate highest Call Open Interest
at 12000 and the highest Put build-up at the strike of 11000. Thus Options data
suggests a wide trading range with resistance at 12000 and strong support at
11000.
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