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 08.09.2019

AAKASHAYA PATRA WEEKLY MARKET OVERVIEW:

Not for the first time, did the Sensex Support Zone (36894-36018) defined by the confluence of Weekly Trendline (36894) and 100 WMA (36018) came into focus for protecting the Market from eroding down any further. The above mentioned Support Zone which forms the lower boundary of the Trading Range, has been giving Support for five consecutive weeks now. Every time it has been tested, it has proved its mettle. A repeated but successful testing of the Support Zone for so long, lends credence to the theory that the Market seems to be preparing for an upward breakout by taking out the upper boundary Resistance in the form of Nifty 200dma (11215). Only if we are able to cross Nifty 11215, the Market will move further up to test the strong Resistances of 11399-11771.

Technically Speaking :-

Sensex opened the week at 37181, made a high of 37188, low of 36409 and closed the week at 36981. Thus it closed the week with a loss of 351 points. At the same time the Nifty opened the week at 10960, made a high of 10967, low of 10746 and closed the week at 10946. Thus the Nifty closed the week with a loss of 77 points.

On the daily charts, both Sensex and Nifty have formed a white body candle. Interestingly, it is third day of Rest after formation of big black body on Tuesday. Bulls are keeping their fingers crossed and hoping that it does not result in the completion of Falling 3 Methods. On the weekly chart, both Sensex and Nifty has formed a Black body Hammer formation which is a Bullish Reversal pattern. On the monthly charts, both the indices have formed a Bullish Doji which requires a confirmation. Thus Candlestick study suggests a Bullish bias in the weekly to monthly timeframe.

It was a repeat viewing for fifth week running as this week again saw the Sensex take Support at the Confluence Zone (36894-36018) of strong Weekly Trendline Support (36894) and 100 Weeks MA (36018). This Confluence Support Zone was tested three times this week before the market staged
a bounce back.

Current Rally will gather steam once Nifty closes above the upper boundary of the Trading Range defined by 200dma i.e. 11215. 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 below the short term average of 20dma (Sensex - 37104 and Nifty - 10958), the medium term average of 50dma (Sensex - 37948 and Nifty - 11269) and even the long term average of 200dma (Sensex - 37463 and Nifty - 11215). Thus the Trend in the short term, medium term as well as long term Timeframe continues to remain down.

MACD is in Buy mode. Price ROC is negative and hence in Sell mode. RSI (46) suggests momentum is still not bullish. Stochastic Oscillator %K (47) has gone above %D and hence is in Buy mode. ADX (31) suggests Downtrend is under further consolidation. Directional Indicators are in Sell mode as +DI is below -DI. MFI(43) suggests Negative Money Flow. OBV has started making higher top higher bottom formation. Thus Oscillators are suggesting a mixed bias.

Options data for September series indicate highest Call Open Interest at 11500 and the highest
Put build-up at the strike of 10800. Thus Options data suggests a trading range with resistance at
11500 and support at 10800.

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