AAKASHAYA PATRA SEVEN STAR SMART EDUCATION SERIES PART – 61 : 10.10.2020

*AAKASHAYA PATRA WEEKLY MARKET OVERVIEW:* 31.05.2020

Bullish Gap (9336-9334) on Thursday has resulted in the Nifty completing a Bullish Island Reversal pattern. This has resulted in the Nifty challenging the Bearish Gap (Resistance zone) of the Bearish Island between 9533-9731. Once this Gap is overcome, Nifty will challenge the previous intermittent Top at 9889 which is also the failure point for the Bearish Island. It will not be easy to overcome these strong hurdles and in any case if it does, Nifty will find it difficult to overcome the Bearish Gap between 10040-10334. On the downside, the Bullish Gap between 9336-9334 will

act as strong Support.

Technically Speaking :-

Sensex opened the week at 30864, made a high of 32480, low of 30512 and closed the week at 32424. Thus it closed the week with a gain of 1752 points. At the same time the Nifty opened the week at 9099, made a high of 9598, low of 8996 and closed the week at 9580. Thus the Nifty

closed the week with a gain of 541 points.

On the daily charts, both the indices have formed a Real White body candle which is third consecutive white candle, indicating continuation of Bullishness. On the weekly timeframe, both Sensex and Nifty have formed a Big Closing White body Marubuzo, which is almost nullifying the Bearishness of last three weeks. Thus daily as well as weekly candlestick study suggests a bullish bias.

This week Nifty has completed a Bullish Island Reversal pattern. This Bullish Island Reversal is now contesting the Bearishness of the Bearish Island. It will be an interesting tussle between Bullish Island and Bearish Island and the winner will be the one which surpasses the failure point of

the Islands which are 9889 for Bearish Island and 8806 for Bullish Island. Failure of Bullish Island will lead the Nifty down to critical level of 8419 and possibly even test the lower bottom of 7511. A break of Bearish Island will lead the Nifty to test higher Bearish Gap at Nifty 10040-10334.

This week, Nifty has formed a Bullish Gap between 9336-9334 which is part of Bullish Island and will act as immediate Support. On the upside, Nifty is testing the Resistance of the Bearish Gap which is part of Bearish Island between 9533-9731.

Both the indices have managed to close above the Short term average of 20dma (Sensex -31415 and Nifty - 9225) as well as Medium term average of 50dma (Sensex - 30679 and Nifty 8986). Both the indices continue to remain below the Long term average of 200dma (Sensex -37303 and Nifty - 10988). Thus the Trend in the Short term as well as Medium term Timeframe has turned Bullish, whereas the Trend in the Long term Timeframe continues to remain Bearish.

MACD as well as Price ROC have given fresh Buy signal. RSI (58) suggests Bullish momentum.Stochastic Oscillator %K (83) is above %D and hence in Buy mode. ADX (12) suggests sideways consolidation with no clear trend. Directional Indicators continue in Buy mode. MFI (55) suggests Positive Money Flow. OBV has started making higher tops, higher bottoms. Thus Oscillators are suggesting a Bullish bias.

Options data for June series indicate highest Call Open Interest at the strike of 10000. Highest Put build-up is at the strike of 9000. Thus Options data suggest a trading range with Resistance at 10000 and Support at 9000.