SMALL WEEK; BIG GAINS.
Despite being a small week of just
three trading sessions, the market registered big gains and in the process
managed a close above the critical resistance level of the previous
intermittent top of 7777. Interestingly, the bullish momentum has taken the market
higher and it is now at the brink of the long term Resistance, which consists
of the Trend line which has been acting as strong Resistance for more than a
year and the critical long term average of 200dma. Next week will be
interesting as the market not only grapples with this critical Resistance but
also digests the results of Infosys which will be declared on Friday.
TECHNICALLY SPEAKING.
Sensex opened the week at 24789, made a high of 25671, low of 24523 and closed the week at 25626. Thus it closed the week with
a gain of 953 points. At the same time the Nifty
opened the week at 7577,
made a high of 7864,
low of 7516 and closed the week at 7850. Thus the Nifty closed the
week with a gain of 295 points.
On the daily charts, both the indices
opened with a big gap up and continued its run to register a big Opening White body Marubuzo. On the
weekly charts, both Sensex and Nifty have formed a big Closing White Body Marubuzo. Thus daily as well as weekly candlestick pattern study
indicates a bullish bias in the near term.
After a gap up opening on Wednesday,
market proceeded from strength to strength and in the process overcame the
previous intermittent top of Sensex 25479 and Nifty 7777. As a result, we now
look at the Retracement of the entire fall from Sensex 30024 to 22494 and Nifty
from 9119 to 6825. The relevant Retracement
levels are placed at Sensex 25371-26259-27148 and Nifty 7702-7972-8243.
MACD and Price ROC are
both positive and have signalled a fresh Buy. RSI (65) indicates bullish
momentum. This week, both the
indices overcame the short term average of 20dma (Sensex – 25048 and Nifty –
7645) and closed above it. Both Sensex and Nifty continues to remain above the
medium term average of 50dma (Sensex – 24386 and Nifty – 7424) but are just
below the long term average of 200dma (Sensex – 25941 and Nifty – 7872). Thus the trend in the short term timeframe has
turned bullish; whereas the trend in the medium term timeframe continues to
remain up but the trend in the long term timeframe continues to remain bearish.
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