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18.08.2019


AAKASHAYA PATRA WEEKLY MARKET OVERVIEW:

Despite being a truncated week, it was a very volatile week nonetheless. On each of the three days, Nifty took support at the Confluence Support Zone defined by the combination of Weekly Trendline along with 100 Weeks Moving Average. Hence the 'Hope' Rally which started a week before continued this week but lacked conviction and strength. Only if Nifty is able to close above 11178, will it be able to gather some strength and move up; expecting strong Resistances at 11399-11771. Till then all rallies are likely to be weak and short lived as Market will treat those rallies as Shorting opportunities.

Technically Speaking :-

Sensex opened the week at 37755, made a high of 37755, low of 36888 and closed the week at 37350. Thus it closed the week with a loss of 231 points. At the same time the Nifty opened the week at 11139, made a high of 11145, low of 10901 and closed the week at 11047. Thus the Nifty closed the week with a loss of 62 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 small Black body candle with a long lower shadow but cannot be called a Hammer. The lower shadow indicates buying at lower levels. Thus Candlestick study suggests a Bullish bias in the near term. On all the three working days of past week, Nifty took Support at the Confluence Zone (10928-10870) of strong Weekly Trendline Support (10928) & 100 WeeksMA 10870). This Confluence Support Zone has held for the second week running and has resulted in a minor Relief Rally Equivalent Support Zone levels for the Sensex falls at 36618-35807.

Current Rally will gather steam once Nifty closes above the 200dma i.e. 11178. Above this Nifty will run into a strong Weekly Bearish Gap Resistances at 11399-11398, followed by another stronger Weekly Bearish Gap 11771-11797. 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 - 37520 and Nifty - 11134), medium term average of 50dma (Sensex - 38617 and Nifty - 11513) and even the long term average of 200dma (Sensex - 37290 and Nifty - 11178). 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 (38) is below %D and hence is in Sell mode. ADX (36) suggests Downtrend is consolidating. Directional Indicators are in Sell mode as +DI is below -DI. MFI (26) suggests Negative Money Flow. OBV is making lower top lower bottom formation. Bollinger Band continues with its Sell signal. Thus Oscillators are suggesting a bearish bias.

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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