AAKASHAYA PATRA WEEKL1Y MARKET OVERVIEW: 20.09.2020

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For the entire last week, except for Wednesday, Nifty has taken Support at the 20dma. Two weeks back after bouncing back from the 50dma, Nifty has formed an intermittent bottom at 11185.Thus the Nifty is now confined in a Trading Range from 11200-11800. A bearish break of Trading Range can lead the Nifty down to test the long term average of 200dma whereas a Bullish breakout can open the gates for Nifty to test the life high levels at 12400. The Weekly Bearish Engulfing formed two weeks back is still not out of the equation as the last two week's candle formation are almost neutral formations. Only a close above 11800 will negate this Weekly Bearish Engulfing pattern. Till then one should focus on Mid Cap and Small Cap stocks which again out-performed the front line indices by more than 3%. But the Star Sectors for the week were Pharma and IT which went up by a stunning 8% and 6% respectively, and the out-performance is likely to continue.

Technically Speaking :-

Sensex opened the week at 39073, made a high of 39359, low of 38573 and closed the week at 38845. Thus it closed the week with a minor loss of 9 points. At the same time the Nifty opened the week at 11540, made a high of 11618, low of 11383 and closed the week at 11504. Thus the Nifty closed the week with a gain of 40 points.

 On the daily charts, both the indices have formed a small Black body candle with a lower shadow, which indicates the buying at lower levels. On the weekly timeframe, both Sensex and Nifty have formed a Black body Spinning Top which is a second consecutive neutral formation on the weekly timeframe. Thus daily as well as weekly candlestick pattern show neutral to minor bullish bias.

 Last week, both the indices formed a Bullish Rising Gap between Sensex 38367-38252 and Nifty 11327-

11298. This Bullish Gap will now act as a Support as it is forming a confluence zone with the 50dma (Sensex 38196 and Nifty 11264) in the nearby vicinity.

The indices are in a short term Trading Range between Sensex 38000-40000 & Nifty 11200-11800. The lower Boundary is a critical Support, which if breached will not only complete a short term Bearish Reversal pattern but will also lead the indices down to test the long term critical Support of 200dma (Sensex 36642 & Nifty 10779). On the other hand, a Bullish break of Trading Range will not only negate the Weekly Bearish Engulfing but also will open the gates to test the life-high levels.

On each day of this week, both the indices tested and took Support at the Short term average of 20dma (Sensex - 38843 and Nifty 11470) before bouncing back. Both the indices continue to remain above the Medium term average of 50dma (Sensex - 38196 and Nifty 11264) as well as above the Long term average of 200dma (Sensex - 36642 and Nifty - 10779). Thus the Trend in the Short term timeframe is still Upwards, whereas the Trend in the Medium Term as well as Long Term Timeframe continues to remain Bullish.

MACD as well as Price ROC both continue in Sell mode. RSI (56) suggests Bullish momentum. Stochastic Oscillator %K (64) is above %D and hence in Buy mode. ADX (17) suggests sideways consolidation. Directional Indicators are in Buy mode as +DI went above -DI. MFI (52) suggests Positive Money Flow. OBV continues in Buy mode. Thus Oscillators are suggesting a mixed bias.

Options data for September series indicate highest Call Open Interest at the strike of 11600. Highest Put build-up is at the strike of 11000. Thus Options data suggest a trading range with Resistance @ 11600 &

Support @ 11000.


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