AAKASHAYA PATRA WEEKLY MARKET OVERVIEW: 26.07.2020

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This week's journey was punctuated by minor hiccups on the Nifty, but they just proved to be easy pickings for the Nifty. The Bulls once again displayed strength and they bought into every opportunity presented in the form of shallow dips. Interestingly every critical Resistance is being dispatched to the Casualty list and the list continues to grow. Interestingly this week, the Nifty has managed a close within the Resistance Zone in the form of Bearish Gap at Nifty 11035-11244 but yet not overcome it. Hence for a change the Resistance Zone still holds. The coming week will see the Nifty not only surpassing this zone but also challenge the Weekly Trendline Resistance falling at Nifty 11330. Immediate Support for the Nifty is between 10953-10933 which is the weekly Bullish Gap.

 Technically Speaking :-

Sensex opened the week at 37409, made a high of 38235, low of 37185 and closed the week at 38128. Thus it closed the week with a gain of 1108 points. At the same time the Nifty opened the week at 10999, made a high of 11239, low of 10953 and closed the week at 11194. Thus the Nifty closed the week with a gain of 293 points.

On the daily charts, both the indices have formed a small white body candle in sideways consolidation.On the weekly timeframe, both Sensex and Nifty have formed a Big White body Candle after creating a Bullish Gap on weekly timeframe. Last week's bearish Hanging Man has got negated by this week's Bullish candle. Thus Candlestick formations suggest a Bullish bias in the near term.

This week, the Bulls fought and tried hard to despatch the daily Gap Resistance between Sensex 37747-38386 and Nifty 11035-11244, to the ever growing Casualty List of strong Resistances led by the critical 200dma. But somehow the indices have not been able to dispose this Resistance off, but have managed to close within that. Next week will see the continuation of this weeks fight and in all probability challenge the Weekly Trendline Resistance coming in at Sensex 38559 and Nifty 11330.

Indices have immediate Support in the form of Weekly Bullish Gap created this week between Sensex 37185-37125 and Nifty 10953-10933, followed closely by Trendline Support at Sensex 36880 and Nifty 10940. A break of this Support can lead the Nifty down to test the higher bottom made two weeks back at Sensex 35877 and Nifty 10562.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 and Nifty 8806.

Both the indices are well above the Short term average of 20dma (Sensex - 36587 and Nifty -10772) as well as Medium term average of 50dma (Sensex - 34524 and Nifty 10177). Both the indices now continue to remain above the Long term average of 200dma (Sensex - 36902 and Nifty - 10862). Thus the Trend in the Short term as well as Medium term Timeframe is Bullish,whereas the Trend in the Long term Timeframe has also turned Bullish.

MACD as well as Price ROC are positive and continue in Buy mode. RSI (71) suggests strong bullish momentum but in Overbought zone. Stochastic Oscillator %K (91) is below %D and hence in Sell mode. ADX (35) suggests UpTrend is strong. Directional Indicators continue in Buy mode as +DI continues above -DI. MFI (67) suggests Positive 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 11500. Highest Put build-up is at the strike of 11000. Thus Options data suggest a short term trading range with Resistance @ 11500 & Support @ 11000.


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