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Sensex

Trend – The index has seen signs of profit booking in the month of January after making new all-time highs of 50184. After the most aw aited budget w as announced, w e have seen a stellar rally of around 9% crossing the highs of January and currently trading near 50255 levels.

Pattern – The index has closed above its previous resistance which says that bulls are in clear control. Any pullback (if any) should be used as a buying opportunity. Major support is at 49200 going forw ard.

Momentum – On the w eekly chart, the RSI has re-entered the overbought territory which saying that the momentum is very strong as of now. Good bullish momentum build-up w as seen in all the sectors specially in Metals, Banking and Capital goods.

Direction – The index is expected to trade in positive territory until it breaks 46000 on the dow nside.

Volatility – The w eekly ATR has reached 1679 points which means that Sensex currently has a range of 1679 points for a given w eek. Although on the daily timeframe, it has remained flat throughout the month w ith few ups and downs indicating the trend in still intact. INDIAVIX (25.34) has gained around 20% which means volatility had increased in anticipation of the budget..

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. 451 stocks of BSE 500 index are above the 200-day SMA indicating the larger trend has been stable. The breadth has declined as compared to last month where 462 stocks were above the 200-day MA.

Our take – Sensex has closed at all time high indicating strong and sustained up trend across all the time frames. Though our bias still remains positive, w e observed some early signs of profit booking in this overstretched rally, hence traders are advised to wait and w atch 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 tow ards 52000-55000 levels. On the downside an immediate support is placed around 49200 levels how ever any violation of this support zone on closing basis may cause short term correction tow ards 48000-47300 levels. Major support zone is around 46400-46000 levels.

 Nifty

Trend – The index has seen signs of profit booking in the month of January after making new all-time highs of 14753. After the most aw aited budget w as announced, w e have seen a stellar rally of around 9% crossing the highs of January and currently trading near 14888 levels.

Pattern – The index has closed above its previous resistance which says that bulls are in clear control. Any pullback (if any) should be used as a buying opportunity. Major support is at 14400 going forw ard.

Momentum – On the w eekly chart, the RSI has re-entered the overbought territory which saying that the momentum is very strong as of now. Good bullish momentum build-up w as seen in all the sectors specially in Metals, Banking and Capital goods.

Direction – The index is expected to trade in positive territory until it breaks 13600 on the dow nside.

Volatility – The w eekly ATR has reached 684 points w hich means that Nifty currently has a range of 684 points for a given week. Although on the daily timeframe, it has remained flat throughout the month with few ups and dow ns indicating the trend in still intact. INDIAVIX (25.34) has gained around 20% w hich means volatility had increased in anticipation of the budget..

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. 451 stocks of BSE 500 index are above the 200-day SMA indicating the larger trend has been stable. The breadth has declined as compared to last month where 462 stocks were above the 200-day MA.

Our take – Nifty has closed at all time high indicating strong and sustained up trend across all the time frames. Though our bias still remains positive, w e observed some early signs of profit booking in this overstretched rally, hence traders are advised to wait and w atch 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 tow ards 15300-15500 levels. On the downside an immediate support is placed around 14400 levels how ever any violation of this support zone on closing basis may cause short term correction tow ards 14300-14000 levels.

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