AAKASHAYA PATRA WEEKLY MARKET OVERVIEW: 01.08.2020

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Surpassing one Resistance after another had become a ritual for the Market, but there was a twist in the tale for the week gone by. It took the Weekly Trendline Resistance at 11344 to stop the rampaging Nifty in its one way upward journey. It started with formation of Bearish Harami on Wednesday, the top of which lay exactly at the Weekly Trendline Resistance. The fall in the Nifty finally found Support at the lower boundary of daily Gap at 11244-11035. For the week ahead,strong Support will be seen at the Weekly Gap Support at 10953-10933 followed by 10860 which is the 200dma. On the positive side, only a weekly closing above Nifty 11344 will negate the bearishness of past week.

 Technically Speaking :-

Sensex opened the week at 38275, made a high of 38617, low of 37431 and closed the week at 37606. Thus it closed the week with a loss of 522 oints. At the same time the Nifty opened the week at 11225, made a high of 1341, low of 11026 and closed the week at 11073. Thus the Nifty closed the week with a loss of 121 points.

On the daily charts, both the indices have formed a small Black body candle with a slightly longer lower shadow. Last three days formed 3 black body candles but cannot be classified as 3 Black Crows as the candle size did not fulfil the criteria. Wednesday completed Bearish Harami with confirmation on Thursday, indicating a Reversal in very short term timeframe. On the weekly timeframe, both Sensex and Nifty have formed a Black body candle which was smaller than real black body candle. Thus daily candlestick formation suggests a Bearish bias in the near term.

Finally the Bulls failed to cross the Weekly Trendline Resistance at Sensex 38627 and Nifty 11344. A price drop from that level saw both the indices fall, before finding Support at the lower boundary of the daily Gap between Sensex 38386-37747 and Nifty 11244-11035. Only a close above Nifty 11344 will negate the bearishness in the near term.

Further fall in the Market can take the Indices down to test the strong Support in the form of Weekly Bullish Gap at Sensex 37185-37125 and Nifty 10953-10933, followed closely by 200dma (Sensex - 36905 and Nifty - 10860). A break of this Support can lead the Nifty down to test the higher bottom made few 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 / Nifty 8806.Both the indices are above the Short term average of 20dma (Sensex - 37221 and Nifty - 10952) as well as Medium term average of 50dma (Sensex - 35260 and Nifty 10393). Both the indices also continue to remain above the Long term average of 200dma (Sensex - 36905 and Nifty - 10860).Thus the Trend in the Short term as well as Medium term Timeframe is Bullish, whereas the Trend in the Long term Timeframe also continues to be Bullish.

MACD is positive but in Sell mode. Price ROC is positive and continues in Buy mode. RSI (60) has dropped but still suggests bullish momentum. Stochastic Oscillator %K (72) is below %D and hence in Sell mode. ADX (39) suggests UpTrend is strong. Directional Indicators continue in Buy mode as +DI continues above -DI. MFI (52) suggests Positive Money Flow. OBV continues in Buy mode. Buy signal in Bollinger Band continues. Thus Oscillators are suggesting a mixed bias.

Options data for August 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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