*AAKASHAYA PATRA WEEKLY MARKET
OVERVIEW:* 19.04.2020
Once again a truncated week, but there wan no dearth of drama. The
Nifty after a long time traded the entire week in a range of just 500 points,
which in current scenario is an acceptable scenario for most market
participants. Volatility Index India VIX dropped another 16% for the week which
is a welcome scenario for the Bulls. In the process, Nifty has managed to close
above 9200 and is now within striking distance of 38.2% Retracement which is at
9390. Retracement levels for the Nifty are placed at 9390-9970-10551. On a note
of caution, Nifty has formed a Hanging Man pattern which can have Bearish
connotations, provided we have a Bearish candle formation on Monday. More
importantly, one needs to remember that this is a Bear Market and there will be
sharp Pull-Back rallies which can fizzle out very fast. Hence it is suggested
to adopt a Cautious approach.
Technically
Speaking :-
Sensex opened the week at 31195, made a high of 31718, low of 30016
and closed the week at 31588. Thus it closed the week with a gain of 429
points. At the same time the Nifty opened the week at 9103, made a high of
9324, low of 8821 and closed the week at 9266. Thus the Nifty closed the week
with a gain of 155 points.On the daily charts, both the indices have formed a
Black Body Hanging Man which can have bearish implications if there is a
confirmation in the form of Bearish candle formation on Monday.
On the weekly timeframe, both the indices have formed a white body
candle with a long lower shadow. The long lower shadow indicates Buying at
lower levels. Thus weekly candlestick pattern study suggests continuation of
Bullish bias whereas the same opinion cannot be held for daily timeframe.This
is the fourth week where the Market continues its Pull-Back which begun after
Sensex made an intermediate bottom at 25638 and Nifty 7511. The Pull-Back
levels are placed at Sensex 31993-33956-35918 and Nifty 9390-9970-10551.
If the current Pull-Back gathers further strength then, both the
indices will face strong Resistance Zone at the Bearish Gap between Sensex
34769-35109 and Nifty 10159-10294. On the downside, if Nifty closes below 8478,
then it can go all the way down to 7511-6150.For the entire week, both the
indices have managed to stay above and even close above the Short term average
of 20dma (Sensex - 29337 and Nifty - 8576), thereby reversing the Short Term Trend
to positive. Both the indices continue to remain below the Medium term average
of 50dma (Sensex - 35221 and Nifty 10316) and even the Long term average of 200dma
(Sensex – 38314 and Nifty - 11311). Thus the Trend in the Short term has become
Positive whereas the Trend in the Medium term as well as Long term Timeframe
continues to remain Bearish.
MACD and Price ROC both continue in Buy mode. RSI (50) suggests
Momentum just turning Bullish. Stochastic Oscillator %K (87) is below %D and
hence continues in Sell mode. ADX (40) suggests Downtrend is now undergoing
consolidation. Directional Indicators are in Sell mode as +DI is below -DI. OBV
continues in Sell mode, making lower top lower bottom formation. MFI (68) suggests
Positive Money Flow. Thus majority of Oscillators are suggesting a Bullish
bias.Options data for April series indicate highest Call Open Interest at 10000
followed by 9500 strike. Highest Put build-up is at the strike of 8000 followed
by 9000. Thus Options data suggest a trading range with Resistance at 9500 and
Support at 9000.
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