*AAKASHAYA PATRA WEEKLY MARKET
OVERVIEW:* 17.05.2020
The record Fiscal Stimulus was not enough to pull the Market up. As
a matter of fact, Nifty made Bearish Belt Hold pattern on Wednesday signalling
Market's disappointment at the announcements made by the FM. The Market definitely
needed stimuli in the form of liquidity to breathe life and kickstart economic
activities;but it needed MORE as was visible by the Markets disappointing
reaction. Probably a cut in the GST for essential items could have been more
effective, as it would have directly transmitted the benefits to the masses.
Once again 50dma acted as strong Resistance as Nifty failed to sustain the
support at 20dma. This opens up the probability for Nifty to test lower
Supports which are placed at 8980-8700-8419. Bearishness can be negated only if
we close above failure point of Bearish pattern which is at 9584.
Technically Speaking
:-
Sensex opened the week at 32030, made a high of 32845,low of 30770
and closed the week at 31097. Thus it closed the week with a loss of 545
points.At the same time the Nifty opened the week at 9348, made a high of 9584,
low of 9043 and closed the week at 9136. Thus the Nifty closed the week with a
loss of 115 points.
On the daily charts, both the indices have formed a small Black Body
candle with a lower shadow but failed to qualify as Hammer. Wednesday saw
Bearish Belt Hold being formed on both Sensex and Nifty which has reversed the
short term uptrend. On the weekly timeframe, both the indices have formed a
Real Black body candle. Thus weekly candlestick pattern suggests a Bearish bias
in the near term.
Last week, both the indices formed a Bearish Gap between Sensex
32748-33354 and Nifty 9533-9731, which will act as strong Resistance. Besides,
the Gap completed a Bearish Island Reversal which indicated the end of
Pull-Back. The Bearish Island can get negated if we have Sensex closing above
33887 and Nifty 9889.
This week formed second Bearish Island but was not significant as it
was in sideways movement. But the second Bearish Gap between Sensex 31630-31901
and Nifty 9281-9351 will definitely act as Resistance in the immediate
timeframe. As the indices continue to drift lower, Retracement Support will be
seen at Sensex 30736-29763-28789 and Nifty 8980-8700-8419. A break of Nifty
8419 will be cause of concern as it can open the passage for a retest of the
Bottom at 7511.
Both the indices have managed to close below the Short term average
of 20dma (Sensex- 31692 and Nifty - 9278) as well as Medium term average of
50dma (Sensex - 31762 and Nifty 9292). Both the indices continue to remain
below the Long term average of 200dma (Sensex - 37601 and Nifty - 11081). Thus
the Trend in the Short term as well as Medium term Timeframe has turned
Negative, whereas the Trend in the Long term Timeframe continues to remain
Bearish.
MACD continues in Buy mode whereas Price ROC is in Sell mode. RSI
(47) suggests a Bearish bias. Stochastic Oscillator %K (20) is below %D and
hence in Sell mode. ADX (14) suggests sideways consolidation with no clear
trend. MFI (52) suggests Positive Money Flow. Buy signal in Bollinger Band has
been negated. Thus Oscillators are suggesting a Bearish bias.
Options data for May series indicate highest Call Open Interest at
the strike of 10000 followed by 9500. Highest Put build-up is at the strike of
9000 followed by 8500. Thus Options data suggest a trading range with
Resistance at 9500 and Support at 9000.
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