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23.02.2020



AAKASHAYA PATRA WEEKLY MARKET OVERVIEW


It was a truncated week but not bereft of excitement and uncertainty. The pull-back witnessed on Wednesday has clearly defined the Trading Range for the Nifty, which is 11900-12250. Since Nifty has formed a Bullish Island Reversal on Wednesday, there is high probability of further upward movement. Only a close below Nifty 11908; will negate the Bullish Island Reversal pattern. For the week gone by, Nifty has been gyrating between 100dma as Support and 50dma as Resistance. A break of 50dma on the upside is likely to propel Nifty towards life-high levels and a bearish break of 100dma will push the Nifty down to test the Support of 200dma. Once again the Mid-Cap Index outperformed the Frontline Indices, which indicates that the Mid-Cap Rally is likely to gather more steam in the days to come.

Technically Speaking :-
Sensex opened the week at 41324, made a high of 41420, low of 40610 and closed the week at 41170. Thus it closed the week with a loss of 87 points. At the same time the Nifty opened the week at 12131, made a high of 12159, low of 11908 and closed the week at 12080. Thus the Nifty closed the week with a loss of 33 points.On the daily charts, both the indices have formed a Black body candle which is just short of being called a real body candle. On Wednesday, Nifty almost completed an Abandoned Baby Bottom, but fell short being called as one, as the White body candle on Wednesday did not have a Real body. On the weekly chart, both the indices have formed a Black body Spinning Top with a longer lower shadow, which indicates buying at lower levels. Thus candlestick study indicates aslightly bullish bias.Nifty has formed a Bullish Island Reversal on Wednesday, which has generated a Buy signal. Some allowance has been granted for Wednesdays candle as it was not a big or real body candle.Failure point for the Island Reversal is 11908. Thus expect some upside as long as the Island Reversal remains intact.
This week both the indices have formed a Bullish Gap. Sensex has formed a Bullish Gap between 41048-41042 and Nifty between 12042-12030, which is likely to act as strong Support.Below this lies a strong Bullish Gap formed between Sensex 40117-40014 and Nifty 11783-11749.

This Bullish Gap will act as strong Support. Stronger Support will be seen further down at the Support Zone of Nifty 11602-11681 which is due to the confluence of 200DMA, 50WMA, 161.8% and 61.8% Retracement levels.Once Sensex closes above the 41700 and Nifty above 12250, both the indices will move higher towards their recent Life-high levels again. Both the indices will then head towards their Bullish Cup & Handle target which is at Sensex 42895 and Nifty 12751. Failure point will be a close below
Sensex 38718 and Nifty 11490. Higher term Sensex target remains at 44700 and Nifty at 13500.This week, both the indices tested the Short term average of 20dma (Sensex - 40993 and Nifty - 12042) and also managed to close above it. Both the indices tested the Medium term average of 50dma (Sensex - 41261 and Nifty 12141), but could not close above it. Both the indices continue to remain above their Long term average of 200dma (Sensex - 39403 and Nifty - 11681). Thus the Trend in the Short term is Up, whereas the Trend in the Medium term Timeframe is still Down. But the Trend in the long term Timeframe still continues to be Bullish.

MACD and Price ROC are both in Buy mode. RSI (50) is positive, which suggests tilt towards Bullish momentum. Stochastic Oscillator %K (71) is below %D and hence is in Sell mode. ADX (15) suggests further consolidation. Directional Indicators are in Sell mode as +DI is below -DI. MFI (50) suggests minor Positive Money Flow. Thus Oscillators are suggesting a mixed bias.

Options data for February series indicate highest Call Open Interest at 12200 and highest Put build-up is at the strike of 12000. Thus Options data suggests a trading range with Resistance at 12200 and Support at 12000.

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