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

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