11.08.2019
*AAKASHAYA PATRA WEEKLY MARKET OVERVIEW:*
After 5 weeks of Bearishness, the Momentum Oscillators like RSI and
Stochastic were into Oversold territory. In this backdrop, Nifty took Support at
the confluence of Weekly Trendline and 100 Weeks Moving Average. Same was the
case with Sensex as it took Support at the weekly Trendline and ditto with Bank
Nifty. In the meanwhile, the FM finally has woken up to the carnage happening
in the market post the Budget. Hence there is a Hope that the FM will announce
some tweak in the taxation of FPIs and possibly some measures to bring back the
confidence in the stock market, besides announcing some relief package for the beaten
down Auto sector and Real Estate sector. Thus the current Relief Rally is more
of a 'Hope' Rally. How far the Market move up depends on how much 'Relief' the
FM can provide. Expect strong Resistances for the Nifty at 11399 - 11771.
Technically Speaking :-
Sensex opened the week at 36842, made a high of 37807, low of 36416
and closed the week at 37581. Thus it closed the week with a gain of 463
points. At the same time the Nifty opened the week at 10895, made a high of
11181, low of 10782 and closed the week at 11109. Thus the Nifty closed the
week with a gain of 112 points. On the daily charts, both Sensex and Nifty have
formed a small white body Spinning Top. On the weekly charts, both the indices
have formed a Real White body candle after five weeks of black body candles.
Thus Candlestick study suggests an onset
of Relief Rally.In the fall, Nifty has taken Support at the Confluence Zone
(10945-10860) of strong Weekly Trendline Support (10945) and 100 WeeksMA
(10860). This Confluence Support Zone has held and has resulted in a Relief
Rally. Equivalent Support Zone levels for the Sensex falls at 36618-35807. Current
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
20dma (Sensex - 37801 and Nifty - 11230), medium term average of 50dma (Sensex
- 38786 and Nifty - 11573) and even the long term average of 200dma (Sensex -
37242 and Nifty - 11166). Thus the Trend in the short term,medium term as well
as long term Timeframe remains Bearish.
MACD is negative but has given a fresh Buy signal. Price ROC is
negative and in Sell mode.RSI (42) suggests Bearish momentum. Stochastic
Oscillator %K (31) is just above %D and hence is giving Buy signal. ADX (38)
suggests Downtrend is consolidating. Directional Indicators are in Sell mode as
+DI is below -DI. MFI (20) 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 Momentum Oscillators are giving mixed signals with no clear
direction.
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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