29.09.2019
AAKASHAYA PATRA WEEKLY MARKET OVERVIEW:
After
testing the Support Zone (confluence of Weekly Trend line and 100 Weeks MA) 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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