The Nifty closed at 4171, gaining 26.45 points or 0.64%. The week has been an indecisive one. In the daily charts, a bullish engulfing pattern has been formed on 14.06.07. However, it needed to close higher with a green candle today. Unfortunately, a red candle has been formed. Though the index has closed positive today, it is just by 1.45 points. This means that, in the absence of a confirmation, we have to maintain our current trend i.e. bearishness in daily charts.
Nifty has broken its horizontal support at 4141 and closed below it on 13.06.07. The next day bulls were seen in action and market was up by 56.95 points or 1.38%. Watch the bullish engulfing pattern in the chart above.
But it appears that bulls have lost momentum now and could not decisively push the market up. We may anticipate further downtrend next week.
In the last week’s review I had mentioned:
“In the weekly chart also, one may find the “bearish engulfing pattern” formation as shown below. However we need a confirmation on a weekly closing basis to decide on the medium term trend reversal.”
Here, the bears have failed to provide a confirmation. A red candle has been formed but the market has closed positive. This is an indication that the market has entered an indecisive phase in medium term charts.
Since neither the bulls nor the bears have won the battle at the end of the week, let us maintain our view on the index: the short term trend is bearish and the medium trend is bullish.
Last week, I had written that few stocks needed confirmation on weekly closing basis.
ABB: “Dark cloud cover pattern” confirmed in weekly chart. The stock has reversed the trend from bullish to bearish.
BHEL: “Bearish engulfing pattern” not confirmed. Stock has gained 6.16% with a green candle formation.
GAIL: “Bearish engulfing pattern” not confirmed. Stock has gained 1.03% with a green candle formation.
HDFC: “Bearish engulfing pattern” not confirmed. Stock has gained 2.06% with a green candle formation.
HDFC Bank: “Bearish engulfing pattern” not confirmed. Stock has gained 1.78% with a green candle formation.
HEROHONDA: “Bearish harami pattern” not confirmed. Though a red candle has been formed, close below 673 could have provided confirmation.
IPCL: “Bearish engulfing pattern” not confirmed. Though red candle has been formed, stock has gained 0.12%
MTNL: “Dark cloud cover pattern” confirmed.
PNB: “Bearish engulfing pattern” confirmed.
RANBAXY: “Bearish engulfing pattern” not confirmed. Stock has gained 1.52% with a green candle.
RELIANCE: “Bearish engulfing pattern” not confirmed. Stock has gained 1.50% despite a red candle formation.
SIEMENS: “Dark cloud cover pattern” not confirmed. Stock has gained 2.54% with a green candle.
SUNPHARMA: “Bearish engulfing pattern” confirmed.
TATAPOWER: “Dark cloud cover pattern” not confirmed. Stock has gained 2.43% with a green candle.
Candlestick formations this week:
ACC: “Bullish piercing line pattern” to be confirmed next week.
GRASIM: “Bullish harami cross” pattern formed. To be confirmed next week.
HCLTECH: “Bearish engulfing pattern” formed. To be confirmed next week.
M&M: “Bearish engulfing pattern” confirmed.
SAIL: “Bullish harami pattern” to be confirmed next week.
SATYAMCOMP: “Bearish engulfing pattern” to be confirmed next week.
This week many candlestick patterns formed over the previous week could not be confirmed. This indicates the indecision in the market.
Advance Decline Ratio:
| Date | Traded | Advanced | % Adv | Declined | % Dec | Unchanged | % Unch |
| 11/06/07 | 1106 | 413 | 37.34 | 659 | 59.58 | 34 | 3.07 |
| 12/06/07 | 1094 | 296 | 27.06 | 776 | 70.93 | 22 | 2.01 |
| 13/06/07 | 1106 | 426 | 38.52 | 645 | 58.32 | 35 | 3.16 |
| 14/06/07 | 1100 | 810 | 73.64 | 254 | 23.09 | 36 | 3.27 |
| 15/06/07 | 1106 | 564 | 50.99 | 513 | 46.38 | 29 | 2.62 |
| Total | 5512 | 2509 | 45.52 | 2847 | 51.65 | 156 | 2.83 |
This means that the bears have dominated slightly during the week.
Following table gives the list of top 5 gainers and losers among cash stocks:
| Scrip | % Gain | Scrip | % Loss |
| AARTIIND | 60.16% | TIMESGTY | 13.88% |
| AARTIDRUGS | 42.98% | RAJTV | 14.46% |
| BLBLIMITED | 39.62% | MOREPENLAB | 15.27% |
| SRGINFOTEC | 33.33% | NUCHEM | 17.78% |
| SIL | 26.17% | KEYCORPSER | 18.09% |
The daily chart of AARTIIND is shown above. Once the stock broke its support it went up very quickly, indicating possible exit opportunity.
The weekly chart of AARTIIND showed a “hammer” last week. However, it is not advisable to trade on single candlestick pattern. Moreover, it broke its previous low of 20.75 on 07.06.07. These things occur rarely, and it is just not possible to visualize them.
Conclusion:
This week was certainly an indecisive one. Let us expect that the index and stocks enter a decisive phase next week!