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04.08.2019


AAKASHAYA PATRA WEEKLY MARKET OVERVIEW:


For the 5th consecutive week, Nifty was down and out for the counting, forming a Big Opening Black body Marubozu. The Bears were in smart control, breaking each critical Support like the Weekly Gap and the 200dma with ease, which does not augur well for the Market. In just two months, relentless selling by the FPIs has seen Nifty fall by more than 10% without any meaningful Pull-Backs. Trend has turned Bearish and any minor Pull-back is getting sold into. On Friday, the Nifty took Support at the confluence of long term Weekly Trend line at 10905 accompanied by the 100 Weeks MA (10848). Interestingly all the Momentum Oscillators are in Oversold Zone, which suggests that finally a Relief Rally may be around the corner

Technically Speaking :-

Sensex opened the week at 38043,made a high of 38043, low of 36607 and closed the week at 37118. Thus it closed the week with a loss of 764 points. At the same time the Nifty opened the week at 11307, made a high of 11310, low of 10848 and closed the Week at 10997.Thus the Nifty closed the week with a loss of 287 points.On the daily charts, both Sensex and Nifty have formed a small white body candle with shadows on both sides, but it fails to fall into the category of a Spinning Top.

On the weekly charts, both the indices have formed a big Opening Black body Marubozu. Thus, weekly candlestick study is  suggesting bearishness whereas daily candlestick has more of neutral bias.Bears were in total command last week, as the indices not only breached Weekly Gap Support, but also the strong Support of 200dma,with ease. Finally on Friday, Nifty has taken Support at the Confluence Zone (10905-10848) of strong Trendline Support (10905) and 100 Weeks Moving Averages (10848). This Confluence Support Zone might hold in the near term and may see a minor bounceback.Equivalent Support Zone levels for the  Sensex falls at 36535-35748.

Any Pull-Back will run into a strong Weekly Gap Resistance 11399-11398 in Nifty. 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.

This week, both the indices closed below the short term average of 20 dma (Sensex - 38216 and Nifty- 11377), medium term Average of 50dma (Sensex - 39044 and Nifty -11667) and even the long term average of 200dma (Sensex - 37185 and Nifty - 11154). Thus the Trend in the short term, medium term as well as long term Timeframe remains Bearish.

MACD and Price ROC are both negative and in Sell mode. RSI (26) suggests Bearish momentum but is oversold. Stochastic Oscillator %K (15) is just above %D and hence is giving Buy signal. ADX (38) suggests Downtrend is very strong. Directional
Indicators are in Sell mode as +DI is below -DI. MFI (12) suggests Negative Money Flow, and is oversold.OBV is making lower top lower bottom formation. Bollinger Band continues with its Sell signal. Thus majority of Oscillators are suggesting a bearish bias. Interestingly all Momentum Oscillators are in oversold zone and suggest a Relief Rally in the near term.

Options data for August series indicate highest Call Open Interest at 11500 and the highest Put build-up at the strike of 11000. Thus Options data suggests a trading range with resistance at 11500 and support at 11000


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