*AAKASHAYA PATRA WEEKL1Y MARKET OVERVIEW:* 28.06.2020

The current Rally was not only huge but also very sharp and fast. It is so typical of a Bear Market Rally which creates doubts in the minds of Market participants whether a Bull Market has resumed. Even though the Nifty has managed to close above the 200 Weekly MA, the Weekly candlestick

Formation is a Neutral formation and raises doubts regarding the current Upward Rally. More importantly, both the indices hit a roadblock in the form of 61.8% Retracement (Nifty 10551) by forming a Bearish Engulfing on daily charts. This suggests a Short Term Reversal unless Nifty closes above 10553. Hence in the near term, Nifty can consolidate between 10500-10000.

 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 34892, made a high of 35706, low of 34499 and closed the week at 35171. Thus it closed the week with a gain of 440 points. At the same time the Nifty opened the week at 10318, made a high of 10553, low of 10194 and closed the week at 10383. Thus the Nifty closed the week with a gain of 139 points.

 On the daily charts, both the indices have formed a Bearish Engulfing on Wednesday at the top suggesting a short term reversal. On Friday, both Sensex and Nifty have formed a Doji like formation with negligible shadows. On the weekly timeframe, both the indices have formed a White Body Spinning Top at the top which can have bearish connotations. Thus daily as well as weekly formation suggests a Bearish bias in the near term.

 The WALL of RESISTANCES finally caught up with the Market as the strong Resistance of 61.8% (Sensex 35918 and Nifty 10551) halted the upward rally in the near term. In case this Resistance gets taken out, another very strong Resistance in the form of weekly Bearish Gap between Sensex 36950-37011 and Nifty 10751-10827 will follow. On the higher side, the 200dma (Sensex- 37010 and Nifty - 10901) will act as extremely strong hurdle to overcome.

Indices have immediate support in the form of Trend line Support which is at Sensex – 33702 and Nifty - 9900. Below this strong Support comes in the form of Bullish Gap on Weekly as well as Daily timeframe i.e. between Sensex 32876-32480 and Nifty 9706-9598.

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 - 34195 and Nifty-10097) as well as Medium term average of 50dma (Sensex - 32556 and Nifty 9576). Both the indices continue to remain below the Long term average of 200dma (Sensex - 37010 and Nifty -10901). 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 (77) is below %D and hence in Sell mode. ADX (20) suggests Trend yet to be developed. Directional Indicators continue in Buy mode as +DI continues above -DI. MFI (46) suggests Negative Money Flow. OBV continues in Buy mode. Buy signal in Bollinger Band continues. Thus majority of Oscillators are suggesting a Bullish bias.

Options data for July series indicate highest Call Open Interest at the strike of 10500. Highest Put build-up is at the strike of 10000. Thus Options data suggest a trading range with Resistance at 10500 and Support at 10000.