NIFTY Ends Week at Range Resistance (21 Sep 2014)

NIFTY Weekly Market Index Chart Analysis

The S&P CNX NIFTY traveled a range of 235 points during the week, but finally closed at 8121.45, a marginal 51 points higher than its open.

As visible on the chart, the range in which NIFTY is traveling since mid-May 2014 still remains valid, and the market closed on the line of resistance, after falling to the middle of the range during the week.

The weekly candlestick is a Hanging Man.  After last week's Doji at the market top, a Hanging Man is not a very positive signal.  The RSI has remained stationery as well and the divergence is not yet cured.  Higher volume shows improving interest trading in the market.

Will NIFTY breakout from the point of Resistance and jump above, or will it dive back into the range?  This should be observed during the week.

8145 is the resistance level for this week.  This keeps going higher each week as the resistance is a slant and not horizontal.

Unfortunately, NIFTY has fallen below the 6-week steep-diagonal support line.  This isn't a heartening signal.

(1) A strong upward move pulling the index high from the resistance point (8145 is the resistance level for the week) ; &(2) the index closing above the resistance line for 2-3 consecutive days can lead to positive signal if other indicators agree. Unless this happens, do not go in for long positions.


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NIFTY Weekly Market Index Chart Analysis

NIFTY Had An Indecisive Week (14 Sep 2014)

NIFTY Weekly Market Index Chart Analysis

The market fell a minor 0.33% this week, and sustained the support line.  However, it is too close to the support line for us to be relaxed.

The weekly candlestick is not a perfect Doji, but it does resemble a Doji.  This is a signal of confusion in an upward trending market.  Volume has risen during the week but range of market movement was relatively small.  The market seems to be gearing up for a bigger move.

Notably, over the past 17 weeks (4 months), the 14-week RSI is forming a bearish divergence to the NIFTY.  This needs to be watched closely, as either the RSI will rise and match NIFTY; or NIFTY will fall and match the RSI.  The divergence has sustained for quite a while now!

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NIFTY Weekly Market Index Chart Analysis

Biocon: Finally Inching Back to Where It Started 9 Years Ago (Sep2014)

Biocon Ltd. Monthly Chart (Each Candlestick represents one month)

Biocon Stock Chart Technical Analysis

Let's look at the long term trend of Biocon prior to charting its current situation.  

Above is the monthly chart since its IPO in 2004.  We can see that if someone invested in the IPO and held on to the share, unfortunately they have not made any profit in 9+ years.  

The current trend has been positive.  The moving 20 & 50 SMA (monthly) (not on this chart) are moving upwards. The 50 monthly SMA has recently crossed the 100 SMA upwards.  Overall the share price has moved upwards since the big fall during 2008 global markets meltdown.

Let's see the dominant trendlines on the monthly chart below.  The current months are where the long term trendlines converge, making it an important time to watch this share.

The stochastics indicator on the monthly chart is oversold (not visible on the chart) and %D has just fallen below the 80% level.  The RSI (not visible on the chart) has also formed a bearish divergence.  This is indicating a correction zone for Biocon, and so we will keenly watch the current rise, and not invest before we can see a clear indication for further rise.

A notable viewpoint is that inspite of uptrending Indian markets and the NIFTY reaching its all-time high, Biocon is still sluggish.  Biocon is zigzag in a fast-rising market, and it gives us a reason to be wary of the further movement of this share.

August made a Doji candlestick, a powerful signal on a monthly chart.  This indicates that the market is largely confused about Biocon's share price.  In September, Biocon has made a good comeback with good volumes.  Let's see if this can sustain.

Biocon has good product lines, including futuristic markets such as manufacturing injectable insulin for diabetics.  This is an ever-growing market and in the long run this share should do well if the company follows solid business practices.

Now let's see what a trader should be doing.

Currently, the entry point is around Rs. 540-550.  Tight Stoploss would be at 510, other Stoploss is at Rs. 460.  Short Target would be Rs. 590-600.  Mid-term target would be 650-680.

Unless price achieves the 540+ level, this share should be watched and not invested.  

On the lower side, Rs. 460 is a point of Resistance-turned-Support. 

The market resisted Rs. 460 for 6 consecutive months (from Dec 13 to May 14), making it s a strong holding point... and now that it has become support we can expect it will hold.

If 460 is broken, then next support is at 410 and then at 375 (Fibonacci Retracements).

Biocon Stock Chart Technical Analysis

Charted on request of Rakesh, New Delhi.

NIFTY Hits Resistance: Weekly Technical Chart 6Sep14

NIFTY Weekly Chart Technical Analysis

NIFTY closed at its resistance on 5Sep14.

It's be a superman-week for NIFTY - up, up & away!

The index has hit resistance near 8086, the weekly closing on 5Sep14.

The 50-day SMA is happily facing north, volume has fallen but still above the average, RSI is above 70% as well.  All positive signals.

If the index jumps above resistance, we well see some new market high next week.  Otherwise there could be some correction to around 7850 levels before hitting support.

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NIFTY Weekly Chart Technical Analysis

Balkrishna Industries: Be Careful & Watch for Breakouts - 6Sep14 Weekly Chart Analysis

Balkrishna Industries Weekly Chart Technical Analysis

Positions in Balkrishna Industries should be avoided right now, till the following happens:-

Short-term perspective: @ Rs. 800 with tight stop loss

Long-term perspective: @ Rs. 830 & above

Observations:-

Balkrishna Industries stunned the market with >300% growth in 12 months from June 13 to July 14.

After a record-high @ Rs. 833, the stock price fell and created anxious moments for traders who entered late.  The price has risen again this week, bringing cheer to many.

But is this a good time to enter Balkrishna Ind? Probably not.

Why:

1) The Head-&-Shoulders pattern seems to be forming.  Just one more dip and the pattern would get confirmed.  This is a potential price reversal pattern and so until we are sure that Head & Shoulders is not forming, new purchase should be avoided.  A clearer view of Head & Shoulders formation can be seen below.

2) The support line is near Rs 683.  It is a short term support (since July14).  The same price level is the 23.6% Fibonacci Retracement from the top.  683 is also the base of the Head & Shoulders pattern.  This line has sustained well.  If share price falls below Rs. 683, danger bells would be set ringing and a price reversal may occur.

3) There is a short term resistance line going diagonally, as seen in Chart 1.  The current price at Rs 772 where it is fighting with resistance.

4) The positives are:- 50-day moving average is at >30 degree incline,  RSI has sustained near 70% level.  A weekly Marabozu candle has formed.  Volume is near the average.  These are positive signs, which tell us that the stock still has strength.

5) Till it breaks above the "Head" at Rs 833, the stock should be watched keenly.


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Balkrishna Industries Weekly Chart Technical Analysis

LIC Housing Finance Looks Strong with Convergence of 6 Support Lines

LIC Housing Finance Daily Chart Technical Analysis

LIC Housing Finance looks strong to take a long-position (buy).

Why?

When you see the chart I have put up, it looks complicated and cluttered.  I avoid such clutter on the charts, but this time the clutter is there for a purpose.  Read further to know why.

LIC Housing Finance has fallen since making a Double Top in May-June 2014.  

Currently, it is showing strength as there is a rare confluence of 6 different support lines.  I have marked them S1-S4 for convenience, and changed the colour / format of 2 addl. support lines.  They are as follows:

1. S1 (1 Month Old Support)
2. S2 (3 Month Old Resistance Turned Support)
3. S3 (4 Months Old Support) 
4. S4 (3+ Years Old Support - Black Line) 
5. 50-Day SMA (Red Line) 
6. 23.6% Fibonacci Retracement (Dotted Line)

Moreover, the RSI is in the 90+ 'very strong' zone.

Candlestick of the day is Dragonfly Doji, also a reversal pattern indicator.

The next lines of Resistance this share should encounter as it rises ahead... are 336 and 350.  

Never trade without a Stop Loss, in this case the SL can be few ticks below S3 (prob @303).

Feel free to comment with your views/questions & I'll be happy to respond.

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LIC Housing Finance Daily Chart Technical Analysis