TCS: Satisfying all parameters for Bullish Trade

Hello all,

here is a small write up on TCS formation. 

TCS is under consolidation since 12th March. After making bottom at 1506 on 13th March, counter is in positive formation, making ascending triangle (highlighted using black trend-lines).
It's been 4 touch points (including one of today) at horizontal resistance line & 5 touch points at 45 degree trend-line support. 

RSI is rising steadily & reaching 55 mark. It seems perfectly strong for ongoing uptrend. 

Upper zone of Bollinger bands was decisively crossed on 23rd April and closing was even higher than upper band zone, giving decisive bullish signal. 
Also lower band of Bollinger is exactly placed on rising trend-line (support line of Ascending triangle)

Bearish DMI was dominating since 20th Feb. Bullish DMI crossed bearish DMI on 23rd April (same day when Bollinger band bullish trigger came). In today's trade, bullish DMI is trying to surpass 25, which will be second bullish sign from indicator (first being crossover). As ADX-DMI indicator is a lagging indicator, signs of trend reversal may come late. Also ADX confirmation remains pending as of now. 

Putting it all together, Looking at Bullish formation with strong RSI & Bollinger band confirmation with partially supportive ADX-DMI, stock is poised for decisive rally till 2150. 

Levels to watch out for:
Breakout: 1900
Support: 1780
Target: 2150 & 2250

- Kunal Rambhia

What Lies Ahead For Equities During Monthly Expiry (April Month Expiry) Week ... Short Term View On Indices !

Hello all, 

Previous week remained more or less flat on Indices and stock specific performance continued on either side. I had highlighted Nifty zone of 9300 to watch out for, which remained resistance for entire week. Let's look at present state of Indices. 

There is no major change in formation. It is interesting to see that Nifty is still trading under the same Rising Wedge formation. In my previous week analysis, I had mentioned that "d" & even "e" may be done. But as week progressed, it seems that point "d" remains pending (yet to touch rising trend line support) and point "e" remains pending thereafter. RSI is moving sideways and still not completely giving away strength. 

To make analysis bit more clear, I am including Bank nifty chart. Bank nifty has clearly underperformed in entire bounce. 

Where Nifty has clearly managed to retrace till 38.2%, bank nifty is struggling in thrust. On formation front, point "c" is not even surpassing high of point "a", making it more like symmetrical triangle. 

If I dive a bit more into the individual candle behaviour during entire formation, it seems that gap downs and bearish candles are more than bullish sentiments. 

ASSUMPTION: I personally feel that both indices will complete their formations before falling further. That means I expect Nifty to bounce after making lower "d", to make potential point "e" on upside. That may take Nifty to approximate zone of 9500. 

Meanwhile Bank nifty will complete symmetrical triangle by touching trendline support and resistance line to create point "d" (may be higher than 18700) and point "e" (may be lower than 21100). Under symmetrical triangle formation, Bank nifty may not surpass 21200-21400 zone.

APPROACH: Needless to say, our approach should be flexible enough because the present bounce is just a RETRACEMENT of entire fall. As soon as the breakdown comes through, we shall be ready to reap the benefit. 

Crucial support zone: 

Nifty @ 8900

Bank nifty @ 19000

Once crucial support zone is taken out, one should approach market with positional bearish view on further confirmation. 

- Kunal Rambhia

What lies Ahead for Equities ... Short term view on Indices !

Hello all,

It's been an unprecedented pain for financial markets across the world. Corona Pandemic is being an invisible enemy for mankind. There is been more than 2 million people infected and approximately 7% lost their lives. Every country is ready to help each other to the extent possible and best of the best brains are working round the clock to find the antidote. 

Coming to economic front, Lockdown created massive destruction to businesses. International businesses are at standstill and local consumption cycle is also disrupted. GDP is shrinking. To support the economy, central bankers across nations pumping in liquidity and taking all possible measures to support the local market. Proactive approach is highly appreciable.

Coming to financial markets, massive sell off is seen across all the markets with extreme high volatility and fear. Uncertainty on economic front and on pandemic front has left market participants confused. Experts are comparing present fall with 1987 fall. Few even went dipper to dig data of 1929 and compare the same. Let's see how our market is placed presently. 

Equity market in India witnessed steep fall of approximately 40% from the top. Pullback from the bottom is almost been 24%. Such swings have taken every market participant with surprise. Let's have a look at how the formations on charts are ...

If we look at daily chart, fall was massive from the top. Due to magnitude of fall, a pullback is natural. Nifty and Dow jones charts are shown. Almost similar formations are seen on both indices. Under this present pullback, there are couple of interesting observations to watch out for ... (keeping Nifty in mind)

1. It's been a Rising Wedge Formation under pullback. As per the characteristic of rising wedge, it's a bearish formation. 

2. Thrust is reached 38.2% of entire fall, which is considered as a decent pullback under Fibonacci theory.

3. During last trading session (17th April), "hanging man" formation is seen. Hanging man is considered to be bearish formation, provided there is a follow up bearish candle. 

4. Last trading session (17th April) showed gap up opening. That gap remains open as of now. If follow through decisive selling emerges, then this gap can be labelled as "Exhaustion Gap", which confirms the mid term "Top" in place. 

5. Due to hanging man formation with gap, there are possibilities of even "Evening star" formation. Evening star, being 3 candle formation, needs third candle to be a bearish candle (preferable gap down opening)

So, putting all together, rising wedge formation getting completed near 38.2% retracement of fall with hanging man formation with gap, all raising red flag. There are likely chances that intermediate top may get formed near 9300 zone. 

Confirmation of top formation will be considered once nifty closes below 8800. Keeping risk reward ratio in mind, it is advisable to take trade on emergence of new bearish candle. 

Brief about Dow jones formation is that rising wedge is getting completed near 50% of retracement with Doji formation (depicts indecisiveness) and gap in place. Rest formations are same. Breakdown confirmation on Dow jones chart will be considered confirmed once closing comes below 23200. 

- Kunal Rambhia