Daily Stock Technical Report 19 November 2013

Sensex (20851) / Nifty (6189)

The opening session of the week began with a decent upside gap considering cheerful mood across the globe. Weakness in the dollar led to optimism in equities and as a result, our market closed with more than two percent gains. Yesterday, all sectors closed in the positive territory, out of which, the Capital Goods, Banking and FMCG conglomerates contributed heavily in the rally. The advance to decline ratio was strongly in favor of the advancing counters. (A=1449 D=1085)

Formation

  •  The ’89-day EMA’ and the ’89-week EMA’ are placed at 20016 / 5948 and 19028/ 5715 levels, respectively.
  • The ’20-day EMA’ and the ‘20-week EMA’ are placed at20647 / 6126 and 20093 / 5978 levels, respectively.
  • The monthly momentum oscillators are now positively poised; whereas the weekly momentum oscillators are contradictory.

 

Trading strategy:

The bulls have tasted success as they managed to recover 200 nifty points in merely two trading sessions. Yesterday, during the initial hour, the index managed to conquer the hourly ’89EMA’ and then eventually closed at the highest point of the day. The Nifty has now tested the 61.8 % Fibonacci retracement level of the fall from 6343 to 5972. This level is at the 6202 mark. Going forward, considering current optimism and the positive crossover in daily momentum oscillators we expect the Nifty to test 6250 – 6305 if it can sustain above the 6202mark. Failure to sustain above 6202 over the next few sessions should be considered as the first sign of caution. On the flip side, 6141- 6110 may provide decent support for the Nifty in the coming trading sessions.

Actionable points:

View Neutral

Support Levels 6141 – 6110

Resistance Level 6250 – 6305

Bank Nifty Outlook – (11142)

Yesterday, in-line with our benchmark index, the Bank Nifty too opened with an upside gap and eventually closed with nearly three percent gains. On the daily chart, the momentum oscillators are positive poised, indicating possibility of a further upside. Hence, going forward, we expect this up move to continue and the bank nifty may test 11400 – 11510 levels if it can sustain above yesterday’s high of 11157. On the other hand, yesterday’s low of 10962 would now act as an immediate support level for the index. Any sustainable move below this level would open up chances of further correction towards 10660 – 10412 levels

Actionable points:

View Neutral

Support Levels 10962 – 10660

Resistance Level 11400 – 11510

Courtesy: angel broking

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