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Sensex

Trend – The index continuous to consolidate in a 3-4 month long consolidation. It continues to make a series of higher highs and higher lows indicating primary trend is still on the bullish side.

Pattern – The index is carrying long lower shadows indicating buying at lower levels . A break above 53300 will open the door to a new leg higher.

Momentum – On the weekly chart, the RSI has eased off the overbought territory which says that the momentum is sideways as of now. Good bullish momentum build-up was seen in sectors like Metals and IT.

Direction – The index is expected to trade in positive territory until it breaks 51800 on the downside.

Volatility – The weekly ATR has reached 1430 points which means that Sensex currently has a range of 1430 points for a given week. Although on the daily timeframe, it has remained flat throughout the month with few ups and downs indicating the trend in still intact. INDIAVIX (12.80) has dropped around 1.86% which means volatility has remained flat.

Market breadth – Sensex has been underperforming the BSE Midcap and BSE Smallcap index on the monthly timeframe indicating that the overall market breadth is mixed. 423 stocks of BSE 500 index are above the 200-day SMA indicating the larger trend has been stable. The breadth has increased as compared to last month where 434 stocks were above the 200-day MA.

Our take – Sensex is hitting all time high indicating positive momentum across all the time frames. Though our bias still remains positive, we may see a play of sector rotation within this bull market and hence traders are advised to wait and watch for short term corrections to create fresh longs. From current levels, the short to medium term trend still remains intact and the bulls to continue their bullish command into the markets towards 55000-56000 levels. On the downside an immediate support is placed around 53300 levels however any violation of this support zone on closing basis may cause short term correction towards 53000-52000 levels.

Nifty 50

Trend – The index continuous to consolidate in a 3-4 month long consolidation. It continues to make a series of higher highs and higher lows indicating primary trend is still on the bullish side.

Pattern – The index is carrying long lower shadows indicating buying at lower levels . A break above 16000 will open the door to a new leg higher.

Momentum – On the weekly chart, the RSI has eased off the overbought territory which says that the momentum is sideways as of now. Good bullish momentum build-up was seen in sectors like Metals and IT.

Direction – The index is expected to trade in positive territory until it breaks 15500 on the downside.

Volatility – The weekly ATR has reached 430 points which means that Nifty currently has a range of 430 points for a given week. Although on the daily timeframe, it has remained flat throughout the month with few ups and downs indicating the trend in still intact. INDIAVIX (12.80) has dropped around 1.86% which means volatility has remained flat.

Market breadth – Nifty has been underperforming the NSE Midcap and NSE Smallcap index on the monthly timeframe indicating that the overall market breadth is mixed. 423 stocks of NSE 500 index are above the 200-day SMA indicating the larger trend has been stable. The breadth has increased as compared to last month where 434 stocks were above the 200-day MA

Our take – Nifty is hitting all time high indicating positive momentum across all the time frames. Though our bias still remains positive, we may see a play of sector rotation within this bull market and hence traders are advised to wait and watch for short term corrections to create fresh longs. From current levels, the short to medium term trend still remains intact and the bulls to continue their bullish command into the markets towards 16600-16800 levels. On the downside an immediate support is placed around 15900 levels however any violation of this support zone on closing basis may cause short term correction towards 15800-15600 levels.

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