Violent Move is in the Offing
Technical View:-
BSE Sensex:- (15807)
The market gained moderately last week, with the Sensex finishing 3.01% or 463 points
higher, and the Nifty gaining 2.79 %. The CNX Mid cap gained 4.48 %. Last week, the
Sensex opened at 15390.15 attained a high at 15957 and fell to a low of 15321.56 before it
closed the week at 15807 thereby showed a net rise of 463 points on a week-to-week basis.
BSE Oil Index, BSE Power Index and BSE Capital good Index lead the Sensex last week,
gained 7.25% 6.75% 5.12% respectively. Consumer Durable Index, Banking Index and Metal
Index also performed well. Bse Reality Index under performed the market, dropped 2.05%.
IT Index remained muted, closed with a loss of 0.75% only. BHEL, REL and RIL were the top
three winners among the Sensex stocks, gained 11.98%, 9.84% and 9.81% respectively.
TISCO, HDFC LTD, HINDALCO, TCS and SBI also joined the gainers; all gained between 4%
and 5%, while INFOSYS was the major loser ahead of the quarterly number, and lost 4.07%.
MARUTI, RANBAXY, HUL, ACC, WIRPO also subdued nearly 2%-3%. In the F&O stocks we found huge upward momentum in ORCHID CHEM, jumped 37.92% for the week. Bulls were very much active in SASKEN COMMUNICATION, NUCLEUS SOFT, GUJ.ALK, RAJESH EXPO, NIIIT TECH, TECH MAH, HOEC, and BHUSAN STL all gained between 15% and 24%. Profit booking found in VSNL, HCL TECH, MATRIX LAB and JSW STEEL all closed well in the red.
Trend Analysis: -
The market is in intermediate down trend since last two weeks when the Sensex top
out from 16452 on 28th March. As of now new intermediate uptrend would be established
should the Sensex climb past 16,237 and the nifty above 4,917, while the CNX Mid cap
crossed its trigger of 6,388 for a moment. It looks from the chart that newly establish down
trend doesn’t make new low against low of 15298 before an intermediate uptrend is
triggered than it will force us to ignore this intermediate down trend and will consider this
move as a consolidation. One should keep in mind that most of the global markets are in
intermediate up trend.
The Sensex has to close above its last intermediate top of 16453 to be back in a bull
market, if the last downtrend signal proves to be a correct one. The corresponding level for
the Nifty is 4971 and 7814 for the CNX Mid cap index. If we compound last five weeks data
then we can find symmetrical triangle on the daily chart which indicates that the ranges
of the tops and bottoms getting lower and lower. In technical terms it’s a reversal pattern
but the breakout form upper range requires confirming the bullish reversal. Supports of
15250-15050-14677 are important and breakout and close above 16500 is
required in order to extend the pull-back. The bear market started with the Sensex's
January 10 high of 21207. It was just over two months old when it made the recently
established intermediate bottom at 14677 on March 18. Falls below that level will mean a
continuing bear market. In the semi log chart the Sensex is facing stiff resistance of down
ward slopping three months long trend line around 16000 levels, so bulls should work hard
to pass these all resistances.
Asian markets closed in the green while all European markets fell nearly 1% on Friday.
US markets dropped sharply. DOW Jones, NASDAQ and S&P 500 all lost nearly 2% on
Friday night. Our market will open on Tuesday due to holiday on Monday so if the Asian
markets and US markets continue to fall on Monday also then the opening for our
market will be joyful for bears only.
Price Pattern View: -
Last week we found ‘Dynamite Pattern’ on the weekly chart. To understand the pattern on
the chart one can see on the weekly chart that since last two weeks the body of the weekly
candle is getting narrower which means each candle is well placed in the shadow of previous
weekly candle’s body. The implication is very violent move on either side after cross
over, that’s why it is called ‘Dynamite Pattern’. The trigger level on the upper side is
16500 and lower level is place at 15250. Psychology behind this pattern suggests that bulls
and bears are fighting with each other on the bourses for the last two weeks. The odds are in
favor of bulls.
Momentum Indicator:
Relative Strength Index on the daily chart is giving positive divergent since last three weeks,
indicates that it is waiting for price signal to follow the up ward direction. Short term moving
averages is congesting with each other suggests that market is in consolidation mode and
trying to find the direction. Trend indicator ADX is coming south ward signals that there is no
trend yet. While D+ and D- is getting narrow, indicates that volatility will expand on either side
in the near future for the trended move
BSE Sensex:- (15807)
The market gained moderately last week, with the Sensex finishing 3.01% or 463 points
higher, and the Nifty gaining 2.79 %. The CNX Mid cap gained 4.48 %. Last week, the
Sensex opened at 15390.15 attained a high at 15957 and fell to a low of 15321.56 before it
closed the week at 15807 thereby showed a net rise of 463 points on a week-to-week basis.
BSE Oil Index, BSE Power Index and BSE Capital good Index lead the Sensex last week,
gained 7.25% 6.75% 5.12% respectively. Consumer Durable Index, Banking Index and Metal
Index also performed well. Bse Reality Index under performed the market, dropped 2.05%.
IT Index remained muted, closed with a loss of 0.75% only. BHEL, REL and RIL were the top
three winners among the Sensex stocks, gained 11.98%, 9.84% and 9.81% respectively.
TISCO, HDFC LTD, HINDALCO, TCS and SBI also joined the gainers; all gained between 4%
and 5%, while INFOSYS was the major loser ahead of the quarterly number, and lost 4.07%.
MARUTI, RANBAXY, HUL, ACC, WIRPO also subdued nearly 2%-3%. In the F&O stocks we found huge upward momentum in ORCHID CHEM, jumped 37.92% for the week. Bulls were very much active in SASKEN COMMUNICATION, NUCLEUS SOFT, GUJ.ALK, RAJESH EXPO, NIIIT TECH, TECH MAH, HOEC, and BHUSAN STL all gained between 15% and 24%. Profit booking found in VSNL, HCL TECH, MATRIX LAB and JSW STEEL all closed well in the red.
Trend Analysis: -
The market is in intermediate down trend since last two weeks when the Sensex top
out from 16452 on 28th March. As of now new intermediate uptrend would be established
should the Sensex climb past 16,237 and the nifty above 4,917, while the CNX Mid cap
crossed its trigger of 6,388 for a moment. It looks from the chart that newly establish down
trend doesn’t make new low against low of 15298 before an intermediate uptrend is
triggered than it will force us to ignore this intermediate down trend and will consider this
move as a consolidation. One should keep in mind that most of the global markets are in
intermediate up trend.
The Sensex has to close above its last intermediate top of 16453 to be back in a bull
market, if the last downtrend signal proves to be a correct one. The corresponding level for
the Nifty is 4971 and 7814 for the CNX Mid cap index. If we compound last five weeks data
then we can find symmetrical triangle on the daily chart which indicates that the ranges
of the tops and bottoms getting lower and lower. In technical terms it’s a reversal pattern
but the breakout form upper range requires confirming the bullish reversal. Supports of
15250-15050-14677 are important and breakout and close above 16500 is
required in order to extend the pull-back. The bear market started with the Sensex's
January 10 high of 21207. It was just over two months old when it made the recently
established intermediate bottom at 14677 on March 18. Falls below that level will mean a
continuing bear market. In the semi log chart the Sensex is facing stiff resistance of down
ward slopping three months long trend line around 16000 levels, so bulls should work hard
to pass these all resistances.
Asian markets closed in the green while all European markets fell nearly 1% on Friday.
US markets dropped sharply. DOW Jones, NASDAQ and S&P 500 all lost nearly 2% on
Friday night. Our market will open on Tuesday due to holiday on Monday so if the Asian
markets and US markets continue to fall on Monday also then the opening for our
market will be joyful for bears only.
Price Pattern View: -
Last week we found ‘Dynamite Pattern’ on the weekly chart. To understand the pattern on
the chart one can see on the weekly chart that since last two weeks the body of the weekly
candle is getting narrower which means each candle is well placed in the shadow of previous
weekly candle’s body. The implication is very violent move on either side after cross
over, that’s why it is called ‘Dynamite Pattern’. The trigger level on the upper side is
16500 and lower level is place at 15250. Psychology behind this pattern suggests that bulls
and bears are fighting with each other on the bourses for the last two weeks. The odds are in
favor of bulls.
Momentum Indicator:
Relative Strength Index on the daily chart is giving positive divergent since last three weeks,
indicates that it is waiting for price signal to follow the up ward direction. Short term moving
averages is congesting with each other suggests that market is in consolidation mode and
trying to find the direction. Trend indicator ADX is coming south ward signals that there is no
trend yet. While D+ and D- is getting narrow, indicates that volatility will expand on either side
in the near future for the trended move
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