SBI - Head & Shoulder Formation

SBI  formed H&S pattern.  Past 3 months action formed Head & Shoulder pattern with 282 level as neck line.   Stock closed below the neckline yesterday with good volume. 

MACD showing clear bearish divergence compared to left shoulder and head. 

Target for head & shoulders pattern is  distance from the top of the head to the neckline, then adding that difference under the neckline.  So in this case target would be 245 level

Stoploss: Stop loss can be placed just above the right shoulder. 

Ultratech Cement Head & Shoulder Formation

Ultratech Cement formed H&S pattern.  Past 4 months action formed Head & Shoulder pattern with 3987 level as neck line.   Stock closed below the neckline yesterday with moderate volume.

It is a complex head & shoulder formation.  It has two left shoulders and two right shoulders.

Target for head & shoulders pattern is  distance from the top of the head to the neckline, then adding that difference under the neckline.  So in this case target would be 3500-3440 level.

There is a possibility of pull back to the neckline level as the stock is oversold in daily time frame.

Stoploss: Stop loss can be placed just above the 2nd right shoulder.

Nifty Weekly Analysis for the week ending 23 June 2017

Last week we discussed “Now Nifty is crucially near uptrending channel and obeying the 8 days down trending channel.   Market should break the prevailing trend decisively in order to gain further momentum…. For further upmove Nifty should close above ELB high.  ”.  Nifty made a sharp pull back and closed above prevailing 8 days down trending channel on First day of week itself but failed to maintain same momentum in coming days and was unable close above ELB high .  Nifty made another identical bearish candle compared to last week candle but hold the low of last week.  In case of Sensex, it made a new high in this week and made upper long legged doji candle.

Nifty opened the week at 9626.4, made a high of 9698.85, low of 9565.3  and closed the week at  9574.95. Thus it closed the week with a loss of 13 points (-0.014%).  

First day of the week, Nifty made higher low and higher high on daily chart and managed to close above Friday’s high  On daily chart, formed a strong bull candle in 15 days.   On Tuesday Nifty made another high but failed to keep previous days momentum and made bearish candle On Wednesday, Nifty made gap down opening and made another bearish candle.  On Thursday, Nifty opened positive, made high above previous two days.  Sensex made new record high.  Market lost all the gain in the second session of the day and closed flat with negative bias.  On Friday, Nifty made another bear candle, lost all the gain made during the week and closed below 20 day moving average.   

• As mentioned above Nifty closed below 20 day moving average.   Earlier  Nifty closed below 20 day moving average in April and May.  This is the third time nifty closed below 20 day moving average since December 2016.   In the previous two occasions, Nifty reversed and made a hefty 457 points in April and a 368 points in May. 

• Nifty made two consecutive bearish candle this week.  Earlier Nifty made two consecutive bearish candles in April since December 2016.  In previous the occasions, Nifty reversed the trend and made 579 points. 

• In previous months, Nifty made bullish moves in the last week of the month.

• Oscillators are showing in oversold and Nifty near its channel bottom.  RSI low during April was 49.96 and present RSI reading is 51.03.  During April, Nifty low at 9075.15 and present low is 9565.3.  In this case RSI fall is more than Nifty fall.  Thus it is a bullish divergence.

Nifty now is in a crucial Juncture for further upmove :.

• Nifty should close above 20 day moving average. 

• As two is the maximum number of weekly bearish candle, coming week is very crucial for upside reversal.  Nifty should protect previous week low (9565.3) and retrace the previous two week candles in fast.

Options data for June series indicate highest Call Open Interest is at the strike of 9700 and highest Put build-up is at 9500.

FIIS/DIIS Data:

FIIS were net buyers in Indian Market and DIIS also were net buyers. 

Global Indices:

Global Indices  ended the week on a Dull note. 

ITC - Update

Currently ITC having a profit of 5200 rupees per set.  Book full profit.

Nifty Weekly Analysis for the week ending 16 June 2017

Key events happened during the week:

•  Fed hiked Interest rate
•  CPI and WPI data released indicating dip in inflation.
• GST Council has reduced the rates for 66 items and expanded the scope of the composition scheme for the benefit of small traders, manufacturers, and restaurateurs

Nifty opened the week at 9646.7 below last week closing, made a high of 9654.15, low of 9560.8  and closed the week at  9588.05. Thus it closed the week with a loss of 80 points (-0.084%).   This is the first time since April Nifty made a weekly lower low closing. 

First day of the week, Nifty traded on lacklustre note and ended with cut around half a per cent.  Nifty / Sensex made a bear candle and broke the bottom of  weekly long legged doji but maintained to close above that.  On Tuesday.   Nifty traded on a firm note for most part of the day but selling in last hour of trade dragged the markets lower to end in red.   Nifty made anther lower low on Wednesday but managed to close positive ahead of Fed policy..  On Thursday, Nifty opened positive, testing upper end of down trending channel and failed to break above the channel and made another lower low on daily chart.  On Friday, Made an inside candle, managed to protect the low but not able make the higher high.  Now Nifty reached near uptrending channel line support.   

Nifty made 368 points  in the upmove from (24 May to 6^th Jun) in 9 days and lost 91 points in the current down move in  (6^th Jun to 15 Jun) 7 days.  Protecting Friday’s low is important for bulls to gain strength.   Now Nifty is crucially near uptrending channel and obeying the 8 days down trending channel.   Market should break the prevailing trend decisively in order to gain further momentum.    I have mentioned in my earlier post, Nifty made ELB (Engulfing Line Bear) candle on Tuesday 06^th June.  ELB is a short term reversal pattern.  Last seven days Nifty is making lower high.   For further upmove Nifty should close above ELB high. 

Oscillators are showing in oversold region and Nifty near its channel bottom.  So both of these combinations give us a probability of moving up than moving down.

Options data for June series indicate highest Call Open Interest is at the strike of 9700 and highest Put build-up is at 9500.

FIIS/DIIS Data:

FIIS were net sellers in Indian Market and DIIS were net buyers. 

Global Indices:

Majority of Global Indices  ended the week on negative note. 

Nifty Weekly Analysis for the week ending 9 June 2017

Key events happened during the week:

•           The RBI kept key policy rates unchanged while reducing the SLR by 50 bps to 20%.
•           Neighbouring Arab countries cut ties with Qatar
•           Hung Assembly in UK Parliament

In this week Sensex / Nifty made another record high of 31430.32/9709.3.  Nifty opened the week at 9656.3, made a high of 9709.3, low of 9608.15  and closed the week at  9668.25. Thus it closed the week with a gain around 14.75 points (0.15%).   After 4 consecutive weekly higher high Sensex closed with a modest loss of 11 points (0.014%).  Sensex made a weekly doji candle. Even though it  signalling some lacklustre type move at the higher levels, but the underlying trend of the Index as per larger timeframe is still up and there is no indication of any reversal signal yet at the highs.    

First day of the week, Nifty made another record high of 9687.2 and end at a fresh closing high of 9675.10.  On Tuesday. Nifty made another record high of 9709.3 and edged down . Nifty made an engulfing line bear candle.   Nifty made a doji on Wednesday showing indecision.  On Thursday, Nifty made a gap up opening but not able to reach ELB high and closed negative below previous day closing.  On Friday Nifty opened with negative note and break the low of ELB made on Tuesday.  But in afternoon made a smart recovery and closed near the high of the day.

I have mentioned in my post dated 27^th May, “… target for current upmove can be 9684-9800 level”.  Nifty reached the target level on Tuesday, up 368 points from the swing low in 12 days, still 90 point less compared to previous swing from 19 April to 17 May (19 days).    So watch for 9800 level in next two weeks time. In order to achieve 9800 level Nifty should close above ELB high.

In the Option front, compared to Call side Put side Option Interests are more significantly which indicate bullishness of the market.  Put side 9600, 9500  and 9400 got highest open interest which can act as a support during June series. 

Upcoming Major Event :

FOMC meeting  on June 14th

Apollo Tyres - Option Strategy Update

Apollo Tyres trade has taken on 1st of June.   Now it is having a profit of 12,000.  Maximum profit can achieve through this trade is 23700.  Now 10% profit is achieved in 7 days.  So Traders can book the profit or lock the trade.

Locking of the trade can be done as follows:
Sell 270 call option at the rate of 6.35 and buy 280 call at the rate of 3.75.
By doing this you lock the profit and maximum profit now increased to 31,500 rupees and minimum profit is 1500 rupees. Maximum profit range is from  260 to 270. If the stock trade below 251 and above 279  the  profit will be reduced to 1500 rupee.

Ambuja Cement - Option Strategy Update

Close 260 Call option at 1.5 and Sell 255 Call Option at 2.25.  After doing this adjustment maximum profit potential reduced to 7125 and max loss reduced to 5375.  

Apollo Tyres - Option Strategy Update

Book partial profit on Apollo Tyres if you hold multiple sets.   Now it is having 6000 rupees profit.

Nifty Weekly Analysis for the week ending 2 June 2017

Key Points:

•           World Indices made  fresh record closure on Positive US Manufacturing and Employment data
•           Sensex made 4th consecutive weekly bullish candle since Dec 2016
•           Nifty / Sensex made 5^th consecutive monthly bullish candle since Dec 2016

On the Monthly Chart Nifty opened the month at 9339.85, made a high of 9649.6, low of 9269.9 and closed the month at 9621.25.  Thus it made a monthly  gain of 317 points (3.4%).  Nifty / Sensex made 5^th consecutive monthly bullish candle and made fresh all-time high in May. Nifty given 22% return since Dec. 2016.

Nifty opened the week at 9560.05, made a high of 9673.5, low of 9547.7  and closed the week at  9653.5. Thus it closed the week with a gain around 58 points (0.6%).  Sectorally, the top gainers were the Pharma, Auto, FMCG and Cement indices. The top losers were the Capital goods, Power, Telecom and Realty indices. Sensex made 4^th consecutive weekly bullish candle.  This is the first time Sensex making  4 consecutive weekly bull candle from December 2016.

First day of the week, Nifty made another record high and end at a fresh closing high.  Nifty made  the 4th consecutive bull candle on Tuesday 30^th May.  4 is the Maximum number of consecutive bull candle made by Nifty from 2016.   So it obeys that and made a bear candle on 5^th day but maintained higher low.  On 1^st day of June Nifty made lower low, but didn’t break 30 May low.  On 6^th June Nifty made record closing at 9653.5 and made a doji in the upper end of channel line.

In the earlier rally from March 2016, on first 5 months Nifty  made 1813 points and on the current rally from December 2016, Nifty made 1727 points, short of 85 points.  So it is almost achieved price wise. Earlier rally from March 2016 long for 6 months.  So if it achieve price wise compared to earlier rally Nifty will reach in a price target of 10037 level. As the monthly/weekly/daily oscillators are in overbought zone, it seems difficult to achieve a target of 10000 level. 

Thus considering daily / weekly / monthly candle stick patterns suggest a bullish bias in the near term.

Indiavix increased to 11.76% from 10.86% last month, indicating a rise in volatility expectations as the markets rallied to new life highs.  Indivix made a low of 8.84% last month, which is the lowest from 2009.

Options data for June series indicate highest Call Open Interest is at the strike of 9700 and highest Put build-up is at 9400. 

Upcoming Major Event :

RBI Monetary Policy Review meeting on June 07th

ITC Option Strategy Update

ITC now trading 1% up today at 317.35.  Out ITC Strategy now on a profit of 4000 plus.

Book the partial profit if multiple sets are taken.  

Apollo Tyre - Option Strategy

After a 38.2% retracement, Apollo Tyres made a bullish breakout.  Oscillators also shown bullish divergence.

But 250 call option at 5 and sell 260 call option at 2.9

Maximum Risk on this trade is 6300 and maximum profit on this trade is 23700.  Risk / reward ratio is 1:3.