Aurobindo Pharma - Bullish breakout

After a 4 week correction, the stock has made a bullish break out above the prevailing trend line.

Buy 740 Call at 27.5 Rupees.
Sell 800  Call at 9.4 Rupees

Maximum risk : 14,480
Maximum Profit potential : 33,520.
Risk Reward Ratio : 1:2

Nifty Weekly Analysis for the week ending 24 August 2017

Key events / development during the week:

• The Supreme Court of India clarified that the liquor ban on highways did not apply to licensed establishments falling within municipal areas
• Cabinet is likely to consider an ordinance to increase the cess on mid-size and large cars and sports utility vehicles to 25% from 15% earlier under the Goods and Services Tax (GST) regime.
• Foreign direct investment (FDI) in India zoomed 37% during the first quarter (April-June) of fiscal year 2017-18 to touch $10.4 billion. 
• Infosys however ended the week on a positive sentiment amid speculation of co-founder Nandan Nilekani's return to the helm

• Global financial markets are closed in positive note.  
• Weekly basis,  FII were sellers in the cash segment
• Options data for August series indicate highest Call Open Interest at the strike of 10000 and highest Put build-is at 9800. 
• The volatility index cooled off sharply in the ongoing consolidation and moved below 13 levels

Nifty opened the week at 9864.25, made a high of 9884.35, low of 9740.1 and closed the week at  9857 with a gain of 20 points (.2%)

Last week we discussed “…….protecting previous Friday’s low (9685.55) and protecting 50 day moving average are crucial for bulls to move up.   Thursday’s high of 9947.8 is a near term strong resistance.   Below 9685.55 more weakness can expect.  .” Nifty managed to protect 9685.55 but not able to move above 9947.8 level.

On the daily charts Nifty have formed a very small Opening Black body Marubuzo, which is almost like a neutral formation. On the weekly charts, both the indices have formed a Doji. Thus daily as well as weekly candlestick patterns suggest sideways in the near term.  Options data also suggests a narrow trading range with resistance coming at 10000 & support at 9800.

Nifty Weekly Analysis for the week ending 18 August 2017

Nifty opened the week at 9755.75, made a high of 9947.8, low of 9752.1 and closed the week at  9837.4 with a gain of 126 points (1.3%)

Last week we discussed “……. For bulls protecting Friday’s low of 9685.55 is crucial. If the index recovers above the channel's support line and the 50 EMA, the bulls might be back in action. If Nifty broken Friday’s low decisively, further correction can be expected……...” Nifty managed to protect Friday’s low and gained 262 points which is 58% retracement to 452 point fall from 2nd August to 11th August.

On Daily chart,  Friday, Nifty made a gap down candle and made first lower high and lower low after 3 days rally.  Action formed a Black Opening Marubozu type candle.  So protecting previous Friday’s low (9685.55) and protecting 50 day moving average are crucial for bulls to move up.   Thursday’s high of 9947.8 is a near term strong resistance.   Below 9685.55 more weakness can expect.
 

Options data for August series indicate highest Call Open Interest at the strike of 10000 and highest Put build-up shifted  to 9800 from 9500. There is a huge  unwinding seen at 9900 PE.

Global financial markets are closed in negative.  Volatility returned to US market.

In last week,  FII were sellers and DII were buyers in the cash segment.   The direction of foreign fund flows is expected to influence the route of the equity indices.  In the recent 1 to 3 months, the inflows from FIIs have reduced

Tata Coffee - Bullish Breakout

Tata Coffee made a bullish break out. It has made a breakout above one month bear rally with good volume.  Oscillators are turned up from oversold zone indicate bullishness.

Nifty Weekly Analysis for the week ending 11 August 2017

Nifty opened the week at 10074.85, made a high of 10088.1, low of 9685.55 and closed the week at  9710.8 with a loss of 356 points 3.7%).    This is the highest weekly fall since March 2016.

Last week we discussed “Breaking Friday’s low invalidate bullish action.     Nifty should trade above ELB candle high (10136.3) for further upmove.” First day of the week, Nifty made  higher opening but not able to sustain above Friday’s candle.  On Tuesday,  Nifty confirmed its bearishness by closing below Friday’s low.  Last 26 days Nifty was trading above 10 day moving average.  Nifty closed below 10d ema in the same time.  Market made lower low and lower high formation throughout the week.  Nifty made a 434 fall against 689 points upmove.  So this is a bigger fall with bigger rally.  Nifty took 5 week for 689 point upmove and it took only one week for 434 point fall.

Nifty closed below 50 day moving average first time since last 7 month.  50 day moving average worked as a good support in all the previous corrections in this trend.  .Vix peaked above alarming 15 level for the first time since Feb 2017.

Market closed near 9700 level which is a strong support for Nifty .    In the upmove 9700 acted as a strong resistance during June 2017.  On 6th June Nifty made an ELB candle by touching high of 9709.3.  On 22 June Nifty made another attempt and failed to move above June 6 ELB candle.  On 10th July Nifty made a hammer type candle and well closed above 9700 level.   As a rule strong resistance become strong support.

At the same time, 61.8%-66% retracement of July – August Rally is placed around 9700 level
Among oscillators, RSI, stochastic & KST are currently poised in oversold territory in daily chart.

This week’s correction has brought down P/E ratio of the Nifty from 25.75 to 24.8.

For bulls protecting Friday’s low of 9685.55 is crucial. If the index recovers above the channel's support line and the 50 EMA, the bulls might be back in action. If Nifty broken Friday’s low decisively, further correction can be expected.  Next support is placed around 9600-9550 level.    If market move below 9449 in a faster time then it can be considered as a reversal to 8 month old bull trend.

Options data for August series indicate highest Call Open Interest has shifted lower at the strike of 10000 and highest Put build-up has also shifted lower to 9500. There is a huge addition of open interest at 9800 CE strike and huge unwinding seen at 9900 PE.  Thus Options data suggests a wide trading range with resistance coming in at 9800 / 10000 and support at 9500

Global financial markets are also in a correction.

In last week,  FII were sellers and DII were buyers in the cash segment.

Nifty Weekly Analysis for the week ending 04 August 2017

RBI cuts repo rate by 25 bps to 6.0 percent, reverse repo rate falls to 5.75 percent.

Nifty opened the month at 9587.95, made a high of 10114.85, low of 9543.55 and closed the month at 1077.1 with a gain of with a gain of hefty 556 points.  In this current rally this is the highest monthly gain.  Also Nifty achieves 10000 mile stone and able to close above it.  Nifty finished 7 months of higher low candles.  Now time wise and price wise Nifty reached previous uptrend from March 2016 to September 2016.

Nifty opened the week at 10034.7, made a high of 10137.85, low of 9988.35  and closed the week at 10066.4 with a gain of 52 points 0.52%).    Nifty made fifth straight weekly gain.

1st day of the week market opened with a gap up closed well above Friday’s candle.  Index traded volatile on next day and managed to close above previous days closing.  The action formed a Doji candle in Sensex, not on Nifty. Index trade in a smaller range ahead of RBI Policy.  On Wednesday, Nifty opened gap up at 10136.3 and made a high 10137.85 and made a low of 10054.2 and closed at 10081.5. The action formed an Engulfing Line Bear (ELB) candle in reaction to RBI policy.  On Thursday Index made a bear candle with open and high same.  On Friday Nifty made piercing line pattern.   Piercing line pattern is a bullish indication.   Breaking Friday’s low invalidate bullish action. Nifty should trade above ELB candle high (10136.3) for further upmove.

This week Index registered fresh life time high.  Nifty made a hefty 689 points in the Bull Run from 30th June to 2nd Aug and made a correction of 150 points in 3 days.

Options data for August series indicate highest Call Open Interest is at the strike of 10500 and highest Put build-up is at 10000.   On Friday, highest OI addition at 10000 put option and same time OI unwinding seen on call side indicate bullishness.

Global financial markets ended the week in the green with most of the indices ending in the positive territory.

FIIs were net sellers in cash market.