Technical Research | August 22, 2011
Daily Technical Report
Sensex (16142) / Nifty (4846)
Markets opened nearly 2% lower due to extreme pessimism
Exhibit 1: Sensex Daily Chart
across global cues and traded with immense volatily
throughout the day to give a close in the neagative territory.
On the sector front IT, Capital Goods and Teck counters
were among the major losers whereas Realty sector ended
with a marginal gain. The advance decline ratio was in
favor of declining counters (A=773 D=2083). (Source -
Formation
The ADX (14) line for Sensex / Nifty continues to
move up from the last week’s level of 21.07 /
20.75 to the current week’s level of 23.15 / 22.85
along with
- DI (Negative Directional Index)
Source: Falcon
moving upwards.
The Daily chart depicts a candlestick pattern which
resembles a “Bullish Hammer”. This pattern needs
This possible upside rally can only be construed as a
a confirmation.
bounce back of the fall which can be used as exit
opportunity for the traders. Also, due to Derivative expiry,
Trading strategy:
the coming week is likely to trade with extreme volatility. On
Our benchmark indices tumbled from a high of 17036 /
the downside, a violation of Friday’s low of 15987 / 4796
5132 during the week and Nifty closed well below the
can take indices to lower levels of 15650 - 15330 / 4675 -
psychological level of 5000. As expected and mentioned in
4540.
our previous reports, markets fell down to test lower level of
16000 / 4800 on Friday’s session. The ADX (14) indicator
continues to move up with the rising
- DI (Negative
Directional Index) which indicates strength in the negative
trend in coming weeks. On the other hand, we are
witnessing a candlestick pattern which resembles a “Bullish
Hammer” coupled with oversold condition of momentum
oscillators indicate a possibility of minor bounce back in
coming sessions if indices manage to trade above the
Friday’s high 16288 / 4894. In this case, indices may test
16450 - 16750 / 4950 - 5050 levels. The said pattern will
be negated if indices break low of the candle.
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Technical Report
RESEARCH TEAM
Shardul Kulkarni
Head - Technicals
Sameet Chavan
Technical Analyst
Sacchitanand Uttekar
Technical Analyst
Mehul Kothari
Technical Analyst
Ankur Lakhotia
Technical Analyst
Research Team: 022-3935 7600
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