AAKASHAYA PATRA WEEKL1Y MARKET OVERVIEW: 21.06.2020

Amazing surprising is the way the Market is able to digest the bad news and continue its journey upwards. Just when it seemed that the Geo-Political border Tension with China will throw the Market off gear, it sprung a surprise as the Nifty ended the week near the high point of the week almost making a Weekly Closing White Body Marubuzo. The way the dips are being bought, doubts are being raised whether it is still a Bear Market.

 In the short term, it is a 'Buy on Declines'; but the question still remains about the Long Term trajectory of the Market. In the Long term timeframe, we still remain in a Bear Market. Bear Market Rallies are usually sharp and deceptive giving the impression that the worst is over, but the fact remains opposite. Nifty is currently facing a WALL of RESISTANCES in the form of 200Weekly moving Averages,61.8% Retracement, Weekly Bearish Gap followed by 200 DMA. Thus the question remains where and when the current Rally ends, till then continue to book profits.

 Technically Speaking :-

Sensex opened the week at 33670, made a high of 34848, low of 32923 & closed the week at 34731. Thus it closed the week with a gain of 951 points. At the same time the Nifty opened week at 9919, made a high of 10272, low of 9726 and closed the weekat 10244. Thus the Nifty closed the week with a gain of 272 points.

 On the daily charts, both the indices have formed a Real White body candle on Friday. On the weekly timeframe, both Sensex and Nifty have again formed a Big Closing White body Marubuzo with a long lower shadow. The lower shadow indicates buying at lower levels. Thus Candlestick pattern study suggests a bullish bias in the near term.

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.

Both the indices are facing a WALL of RESISTANCES. Currently the indices have closed inside the strong Resistance due to the Daily Bearish Gap between Sensex 34472-35261 and Nifty 10040-10334, which is accompanied by strong Resistances due to 200 Weekly MA. Besides this,the 61.8% Retracement at Sensex 35918 and Nifty 10551 followed by a weekly Bearish Gap between Sensex 36950-37011 and Nifty 10751-10827. Lastly 200dma (Sensex - 37064 and Nifty -10917) will act as strong hurdle which seems difficult to surpass.

Indices have formed a Support Zone between Sensex 33049-32480 and Nifty 9748-9598 which was due to the confluence of last week's Bullish Gap on Weekly as well as Daily timeframe i.e. between Sensex 32876-32480 and Nifty 9706-9598 along with Trendline Support (Sensex - 33049,Nifty - 9748).

 Bullish Island still holds, whose failure point is below the Low of Opening White Body Marubuzo which is at Sensex 32348 and Nifty 9544. In case of a failure of Bullish Island, Market will go down to test the higher bottoms at Sensex 29968 / Nifty 8806.

Both the indices are well above the Short term average of 20dma (Sensex - 33309 and Nifty -9832) as well as Medium term average of 50dma (Sensex - 32096 and Nifty 9432). Both the indices continue to remain below the Long term average of 200dma (Sensex - 37064 and Nifty - 10917).Thus the Trend in the Short term as well as Medium term Timeframe is Bullish, whereas the Trend in the Long term Timeframe continues to remain Bearish.

MACD as well as Price ROC are both positive and continue in Buy mode. RSI (64) suggests bullish momentum. Stochastic Oscillator %K (69) is above %D and hence in Buy mode. ADX (17) suggests UpTrend getting developed. Directional Indicators continue in Buy mode as +DI continues above -DI. MFI (56) suggests Positive Money Flow. OBV continues in Buy mode. Buy signal in Bollinger Band continues. Thus Oscillators are suggesting a Bullish bias.

Options data for June series indicate highest Call Open Interest at the strike of 10500. Highest Put build-up is at the strike of 9500. Thus Options data suggest a trading range with Resistance at 10500 and Support at 9500.