Weekly Stock Market Technical View

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September 6, 2016
 

Dear Member,

Nifty close 8809 points: The Nifty opened flat but did not break the crucial support area of 8517-8543 points which it was holding above for the last 5 weeks. When it crossed last week’s high of 8684 points the Bears started scurrying by covering their shorts. This coupled with speculative buying as the Nifty broke above the recent top of 8728 points saw the Nifty hitting a new 52 week high of 8824 points. This has once again shifted the onus on the Bears to push down prices as the Bulls are sitting pretty.

Even though the trend is firmly up and the Bulls in control the oscillators are exhibiting a negative divergence on the weekly scale which should not be ignored. Last week, the Nifty bounced up from weekly trendline support (connecting the lows of 6825-7927 points), which has now moved up to around 8675 points for this week. This should be an absolute Stop Loss on from at least a short term trading perspective. The next crucial support from a medium term perspective remains the 8517-8543 points range.

Support for this week is pegged at 8725 points and as long as the Nifty remains above this the upside targets are 8908 and 9006 points with a hurdle at 8845 points in between. If the above mentioned support is broken then the Nifty will slide to 8627 or 8445 points. The trend is firmly up and most market players are looking at new highs which seems on the cards in the medium term but looking at the negative divergences in price as well as volume oscillators the risk associated with it is too high. Therefore we would prefer to exit this rise and be stock specific at best rather than try to pile on it.

Bajaj Corp Ltd. Cmp Rs.408.50

Last week’s bullish candle has seen this stock close decisively above the resistance pegged in the Rs.402-404.50 range with a significant jump in volumes. After the sideways activity seen for the past couple of months this stock has the potential to move up to at least Rs.424 or on the higher side Rs.438, in the weeks ahead. However one should buy in dips close to Rs.398-402 looking at the overall position of the market and keep a SL below Rs.390 in close. The enterprising ones who are ready to buy at cmp should keep the above mentioned targets in mind and exit close to these levels.

Reliance Comm. Cmp Rs.49.25

This stock made a high of 55.35 and a low of 47.35 (after Jio’s launch) and finally settled at 49.25. It should be bought from a medium term perspective with the Stop Loss levels in close as mentioned.

Update: HCC Ltd: Rs.35.55

HCC was up a whopping 51% last week. It made a high of Rs.37.85 and a low of Rs.22.75, last week. In the process it has completed our medium term target of Rs.36-41 as recommended last month at Rs.23.15 on 08/08/16.

Update: ONGC Ltd. Cmp Rs.238.75

It made a high of 242.50 and declined to a low of 235.10 before settling at 238.75 for the week. Medium term players should certainly buy if it dips to the support levels mentioned for a target in the 260-267 area in the months ahead.

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