GMR Infra - Bullish Breakout

GMR Infra has made 10 year long bear market breakout with good volume. 

Buy GMR Infra with a stoploss of 16.3.

Reliance Power - Bullish Breakout

Reliance Power was trading in a well structure a falling trend line for the last one year. 

The stock made a breakout on Friday with good volume. 

Buy 50 Call Option at 3.75
Sell 57.5 Call Option at 1.5

Maximum Risk : 29250
Maximum Profit: 68250

Risk Reward Ratio : 1:2

Nifty Weekly Analysis for the week ending 29 December 2017

On the Yearly chart, Sensex opened the year at 26711, made a high of 34138, low of 26447 and closed the year at 34057 with a gain of 7430 points (28%).  At the same time the Nifty opened the month at 8210, made a high of 10552, low of 8134 and closed the month at 10531. Thus the Nifty closed the year with a gain of 2345 points (29%).  Sensex, Nifty Post Best Annual Gains In Three Years

On the monthly chart, Sensex opened the month at 33248, made a high of 34138, low of 32565 and closed the month at 34057 with a gain of 907 points (2.74 %).  At the same time the Nifty opened the month at 10264, made a high of 10552, low of 10033 and closed the month at 10531. Thus the Nifty closed the month with a gain of 304 points (2.97%).

Sensex opened the week at 33981, made a high of 34138, low of 33752 and closed the week at 34057. Thus it closed the week with a gain of 117 points (0.34%). At the same time the Nifty opened the week at 10512, made a high of 10552, low of 10460 and closed the week at 10531. Thus the Nifty closed the week with a gain of 38 points (0.36%).

Let us discuss few observations on last week/month Indian benchmark movements. 

1. India's key equity indices Sensex and Nifty50 closed calendar year 2017 higher by 28 per cent and 29 per cent respectively
2. India was the third best emerging market in the world this year after Argentina and Turkey, according to Bloomberg
3. Equity benchmarks traded in a narrow range and closed higher by 0.3% during previous truncated week amid muted global cues.
4. Last week , in point no.4, we have discussed “On Friday, Sensex has formed a bullish White opening Marubuzo.  On the weekly charts, both the indices have formed a bullish White closing Marubuzo.  Both daily and weekly indicate the bullishness of the market. “.  The Nifty started the week on a positive note and formed a fresh all time high of 10552 in Wednesday’s trade. Profit booking in the middle of the week saw the index gave up some of its gains and formed an intraweek low of 10460. The index however witnessed a pullback on Friday’s trade to close the week above 10500 levels for the first time.
5. Last week, in point no.7 we have discussed “Next week will be a truncated week with Monday being a trading holiday.   There is a probability of profit booking at higher levels as a bearish divergence persist on RSI.   Nifty has set a fresh 14-period high, while RSI has not. Also, it has continued to form lower tops and is yet to break out of this formation. The weekly MACD is still bearish even as it trades below the signal line.   So once the lead indicators come out of bearish divergence, we can expect the above mentioned target of 11000.”.  Bearish Divergence still evident in RSI. 
6. The Index maintained positive bias with higher high and higher low sequence and gained for fourth consecutive week.  Looking at the bull trend from 2016, maximum number of weekly bull candle is 5.  So probably there is a chance of correction in coming week or the week after coming week.
7. I am considering the immediate support base for the index in 10200-10300 region as it is the confluence of following:
1. The present value of rising trend line joining the lows of December 2016 and September 2017 placed around 10200 levels.  On a weekly closing basis, the index has continued to show respect to the trend line joining the December 2016 and September 2017 low. 
2. The 61.8% retracement of the recent up move from 10033 to 10552 placed around 10232
3. Option data also suggest 10300 level will be an immediate support for January.
8. I have mentioned in my post dated 3^rd December in point no.6 “In December Indian Benchmark complete 22 months of bull market. Index topped every 2 years and made a good correction after that.  Let us look at the  major reversals, in 1992 (-57%), 1994 (-39%), 1996 (-34%), 1998 (-36%),2000 (-58%), 2002 (-25%), 2004 (-33%), 2006 (-30%), 2008 (-64%), 2010 (-28%),2013 (-14%),2015 (-25%).   So timewise Indian benchmark is nearing its maturity for a correction.”.  Now Indian Benchmark completed 22 months of bull market.   If we consider a 15% correction market may fall until 8980-9000 level for Nifty and for Sensex, it is 29000-29100 level.  Previous resistance in July 2016 and 61.8% retracement from December 2016 also placed in the same region.   So I don’t think the possibility of going below this area.   If market goes to this level, it can be treated as a good buying opportunity.  Until we get a significant correction, it is early to assume bull trend is over. 
9. Global financial markets: Global stock markets ended the week on a mixed note
10. On Weekly basis, FII were buyers in the cash segment.  On monthly basis FII were net sellers in cash segment. 
11. Options data for January series indicate highest Call Open Interest is at the strike of 11000 whereas the highest Put build-up continues at the strike of 10300. Thus Options data 10300 level will be an immediate support in January series and 11000 will act as an immediate resistance.

Wish you a happy and prosperous New Year 2018

Nifty Weekly Analysis for the week ending 22 December 2017

Sensex opened the week at 33364, made a high of 33964, low of 32595 and closed the week at 33940. Thus it closed the week with a gain of 477 points (1.43%). At the same time the Nifty opened the week at 10263, made a high of 10501, low of 10074 and closed the week at 10493. Thus the Nifty closed the week with a gain of 160 points (1.55%).  The benchmark indices settled at record closing highs with the Nifty touching its crucial 10,500 in last leg of trade, but ended below that mark.

Let us discuss few observations on last week/month Indian benchmark movements. 

1. In point no.1 of Last week we had discussed “On the weekly charts, both the indices have formed higher high higher low candle which is a classic bullish setup.”  Market triumphs for third straight week, mark record highs
2. In point no.2 of Last week we have discussed “On weekly chart almost a bullish hammer pattern is formed which is signalling an emergence of sharp buying interest from the lows. Confirmation require on next candle for bullish reversal.”   First day of week itself market closed above previous week high and confirmed the bullish reversal.
3. In point no.5 of Last week we have discussed “ Both indices made higher top, higher bottom candle on weekly chart but,  still trading below down trending channel line.  Market to close well above the channel line for the bullish reversal.   Also  Nifty should break above previous month high to negate the correction is completely over.  ".  First day of the week Indices closed above critical Trend reversal level of Sensex 33369 and Nifty 10333. Also broke previous month high.
4. On Friday, Sensex has formed a bullish White opening Marubuzo.  On the weekly charts, both the indices have formed a bullish White closing Marubuzo.  Both daily and weekly indicate the bullishness of the market. 
5. From 28 September to 6^th November Nifty gained 803 points in 25 days and the counter trend from 6th November to 6^th December Nifty corrected 458 points in 21 days which is 57% of the 803 point.  Market reversed on 6^th December and retraced more than 100% in 12 days i.e. 468 points against 458 points.  Timewise Nifty retraced in half of the time the correction took.   This indicate bullishness of the market and so target for this upmove set in the range 10700-10850 range..
6. As per Dow Theory, Index completed a bullish inverse head and shoulder pattern on daily time frame and the target is 11000.
7. Next week will be a truncated week with Monday being a trading holiday.   There is a probability of profit booking at higher levels as a bearish divergence persist on RSI.   Nifty has set a fresh 14-period high, while RSI has not. Also, it has continued to form lower tops and is yet to break out of this formation. The weekly MACD is still bearish even as it trades below the signal line.   So once the lead indicators come out of bearish divergence, we can expect the above mentioned target of 11000.
8. Global financial markets: Global stock markets ended the week on a positive note
9. On Weekly basis, FII were sellers in the cash segment. 
10. Options data for December series indicate highest Call Open Interest is at the strike of 10500 whereas the highest Put build-up continues at the strike of 10000. Thus Options data suggests a trading range with resistance at 10500 & support at 10000.  There is huge unwinding seen in 10400 call strike.  10500 call strike also there are unwinding seen.  At the same time adding of Open Interest seen in put strike 10450 and 10500.  These indicate bullish momentum of market.   Looking at the January series highest OI at call option seen at 11000 strike and put option open interest seen at 10000 strike. 

Gail Bull Call Spread Update

Gail trade is now in a profit of 5000 rupees.   Book the profit at current level. 

Nifty Weekly Analysis for the week ending 15 December 2017

Sensex opened the week at 33318, made a high of 33622, low of 32887 and closed the week at 33463. Thus it closed the week with a gain of 213 points (0.64%).  At the same time the Nifty opened the week at 10310, made a high of 10373, low of 10142 and closed the week at 10333. Thus the Nifty closed the week with a gain of 68 points (0.66%).

Let us discuss few observations on last week/month Indian benchmark movements. 

1. On the weekly charts, both the indices have formed higher high higher low candle which is a classic bullish setup.
2. On weekly chart almost a bullish hammer pattern is formed which is signalling an emergence of sharp buying interest from the lows. Confirmation require on next candle for bullish reversal. 
3. On the daily charts, both the indices made a gap up opening on Friday.
4. On the daily charts, both the indices have made higher high candle and made a highest closing in the week. 
5.  Last week I have mentioned “It is early to conclude the correction is over.   Because Indices are trading below slopping down trending channel connecting 6^th November and 28^th November.  Also lower top lower bottom is formed on weekly chart.  So until made a breakout above down trending channel and made a higher top, higher bottom candle on weekly chart we can consider this as a relief rally only.”.  Both indices made higher top, higher bottom candle on weekly chart but,  still trading below down trending channel line.  Market to close well above the channel line for the bullish reversal.   Also  Nifty should break above previous month high to negate the correction is completely over.    
6. Volatility peaked on Thursday and as soon as the Exit Polls results were out, the market experienced Volatility Crunch.
7. Next week’s movements are very crucial to decide market direction, because Gujarat and Himachal Pradesh results are coming on Monday. 
8. For next week, Thursday’s low is the crucial support.  If that was not held next support comes at 10033 – 10000 level.  Highest put side open interest, Down trending channel line support are placed near this levels.  For bulls closing above Friday’s high is required to gain the momentum.
9.  MACD has given a fresh Buy signal on daily chart.
10. Global financial markets: Global market ended on a mixed note.
11. On Weekly basis, FII were buyers in the cash segment. 
12. Options data for December series indicate highest Call Open Interest is at the strike of 10500 whereas the highest Put build-up continues at the strike of 10000. Thus Options data suggests a trading range with resistance at 10500 & support at 10000.

M&M Bullish Breakout

M&M made a bullish breakout after 18 months of consolidation.   Buy above 1509 for the target of 1900.

Nifty Weekly Analysis for the week ending 08 December 2017

Sensex opened the week at 32968, made a high of 33285, low of 32565 and closed the week at 33250. Thus it closed the week with a gain of 417 points (1.27%). At the same time the Nifty opened the week at 10175, made a high of 10271, low of 10033 and closed the week at 10266. Thus the Nifty closed the week with a gain of 144 points (1.42%).

Let us discuss few observations on last week/month Indian benchmark movements. 

1. On the daily charts, both the indices have made 6 lower low, lower high candles and on Thursday protected previous day’s low and break above previous 3 days high.  With Thursday’s gain Index negated lower low, lower high formation and resumed its bull move. 
2. On the daily charts, both the indices have formed big Opening White Body Marubuzo on both Thursday and Friday which is signalling for a reversal.
3. Both Indices took support near 100 day ema.  Both Indices closed well above 50 day moving average and 10 day moving average on Friday.  
4. On the weekly charts both the indices have formed a bullish hammer candle  which indicates fresh buying at lower levels. Thus daily as well as weekly charts suggest a bullish bias in the near term.
5. It is early to conclude the correction is over.   Because Indices are trading below slopping down trending channel connecting 6^th November and 28^th November.  Also lower top lower bottom is formed on weekly chart.  So until made a breakout above down trending channel and made a higher top, higher bottom candle on weekly chart we can consider this as a relief rally only. 
6. Last week I have mentioned “On Monthly chart, Nifty made a bearish candle.  If Nifty breaks 10094, that will lead to lower high lower low pattern on monthly chart and  result in a change in short term trend according to Dow theory.  Nifty never made a lower low pattern on monthly chart since December 2016.”  Last month Indices made a bearish candle and in this month Indices formed lower top lower bottom pattern.  Nifty should break above previous month high to negate the correction is completely over.     
7. We have discussed in last week “On Daily Chart RSI in oversold region.  Also showing bullish type 2 divergence...  .  “.   Daily stochastic and RSI turned up from oversold region.
8. Global financial markets: Global market ended positive.
9. On Weekly basis, FII were sellers in the cash segment. 
10. Options data for December series indicate highest Call Open Interest is at the strike of 10500 whereas the highest Put build-up has further increased and continues at the strike of 10000. Thus Options data suggests a trading range with resistance at 10500 & support at 10000.  There is highest open interest addition at put option strike 10200 and unwinding of call option interest is seen which indicate bullishness of the market.  

Gail - Bullish Breakout

Gail made a bullish breakout with good volume after one month consolidation. 

Buy 500 Call Option at 11.6
Sell 520 Call Option at 5.75

Maximum Profit on this trade is : 28300
Maximum Loss on this trade is : 11700

Risk Reward Ratio is 1:2

Nifty Weekly Analysis for the week ending 01 December 2017

On the monthly chart, Sensex opened the month at 33344, made a high of 33866, low of 32684 and closed the month at 33149 with a loss of 64 points (-0.19 %).  At the same time the Nifty opened the month at 10390, made a high of 10490, low of 10094 and closed the month at 10227. Thus the Nifty closed the month with a loss of 109 points -1.1%).

Sensex opened the week at 33641, made a high of 33770, low of 32798 and closed the week at 32833. Thus it closed the week with a loss of 846 points -2.51%). At the same time the Nifty opened the week at 10361, made a high of 10410, low of 10109 and closed the week at 10122. Thus the Nifty closed the week with a loss of 268 points (2.58%)

Let us discuss few observations on last week/month Indian benchmark movements. 

1. On weekly chart, Sensex & Nifty made a biggest bear candle since August 1^st week.. 
2. On Monthly chart, Nifty made a bearish candle.  If Nifty breaks 10094, that will lead to lower high lower low pattern on monthly chart and  result in a change in short term trend according to Dow theory.  Nifty never made a lower low pattern on monthly chart since December 2016. 
3. This week both the indices have breached the Bullish Gap between 33278-33165 for the Sensex and 10268-10232 for the Nifty.  As a result, both Sensex and Nifty are now at the critical Support in the form of Bullish Gap between Sensex 32804-32670 and Nifty 10120-10104. This Bullish Gap has acted as Support and market have closed just above this level.  A break of this Gap will result in the intermediate trend turning down and the Correction will resume.
4. The India VIX index shot up 10 per cent to 14.8 from the previous week’s close of 13, indicating more turbulence in the week ahead.  It is making a rounding bottom like pattern and if it break 15.54 level then more serious fall can happen. 
5. Rising Trend line connecting  June/September candles supports come at  9850.  Once 10094 support breaks next support is at 9850. 
6. In December Indian Benchmark complete 22 months of bull market. Index topped every 2 years and made a good correction after that.  Let us look at the  major reversals, in 1992 (-57%), 1994 (-39%), 1996 (-34%), 1998 (-36%),2000 (-58%), 2002 (-25%), 2004 (-33%), 2006 (-30%), 2008 (-64%), 2010 (-28%),2013 (-14%),2015 (-25%).   So timewise Indian benchmark is nearing its maturity for a correction. 
7. Looking at the Bank Nifty chart, protecting 25119 is crucial.  On breaking this level, fall will continue..       
8. On Daily Chart RSI in oversold region.  Also showing bullish type 2 divergence...  . 
9. Global financial markets: Global market ended mixed.
10. On Weekly basis, FII were sellers in the cash segment. 
11. Options data for December series indicate highest Call Open Interest is at the strike of 10500 whereas the highest Put build-up has shifted lower to 10000. Thus Options data suggests a trading range with resistance at 10500 & support at 10000.   Aggressive open interest addition is seen at the call strike of 10300 and 10400.