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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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