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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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