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14.09.2019


*AAKASHAYA PATRA WEEKLY MARKET OVERVIEW:* 

After testing the Support Zone (confluence of Weekly Trendline and 100 WeeksMA) for six consecutive weeks, the Market has moved higher and is now looking ripe and ready to challenge the upper end of the Trading Range which is defined by Nifty 200dma (11222). A close above Nifty 11222, will take the Nifty higher to test the strong Resistances at 11399-11771. For the first time in many weeks, the Mid-Cap and Small-Cap indices have made a strong comeback. A Rally for the mid-cap and small-cap stocks is long overdue as many stocks are into Oversold Territory not only in weekly but even in monthly timeframe. Thus as a trader one can look for opportunities to go long in selected mid-cap and small-cap stocks as the momentum begins to pick up.

Technically Speaking :-

Sensex opened the week at 36969, made a high of 37435, low of 36784 and closed the week at 37384. Thus it closed the week with a gain of 403 points. At the same time the Nifty opened the week at 10936, made a high of 11084, low of 10889 and closed the week at 11075. Thus the Nifty closed the week with a gain of 129 points.

On the daily charts, both Sensex and Nifty have formed a real white body candle which negates the formation of previous Bearish Engulfing. On the weekly chart, both Sensex and Nifty have formed a Closing White body Marubuzo which augurs well for the coming week. Thus Candlestick study suggests a Bullish bias in the near term.
Finally after taking Support, for the sixth consecutive week, at the Confluence Zone (37015- 36067) of strong Weekly Trendline Support (37015) and 100 WeeksMA (36067). This Confluence Support Zone was tested numerous times in past six weeks before giving a bounce back. The bounce back this time looks more decisive as the participation of mid-cap and small-cap stocks is giving further strength to the rally.
Current Rally will gather steam once Nifty closes above the upper boundary of the Trading Range defined by 200dma i.e. 11222. 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 long Term Trend; till then any pull-back will be treated as Selling opportunity by the Market. This week, both the indices closed above the short term average of 20dma (Sensex - 37121 and Nifty - 10967) but continue to remain below the medium term average of 50dma (Sensex - 37761 and Nifty - 11204) and even the long term average of 200dma (Sensex - 37496 and Nifty - 11222). Thus the Trend in the short term has turned Bullish whereas the trend in the medium term as well as long term Timeframe continues to remain down.
MACD and Price ROC both continue in Buy mode. RSI (52) suggests momentum is bullish. Stochastic Oscillator %K (78) has gone above %D and hence is in Buy mode. ADX (27) suggests Downtrend is losing strength. Directional Indicators continue in Sell mode as +DI remains below - DI. MFI (58) suggests Positive Money Flow. OBV is in Buy mode making higher top higher bottom formation. Thus Oscillators are suggesting a Bullish bias.
Options data for September series indicate highest Call Open Interest at 11200 and the highest Put build-up at the strike of 10800. Thus Options data suggests a trading range with resistance at 11200 and support at 10800.

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