Market at resistance levels

New high- New Low index for this week shows higher high's indicating that more scrips have hit 52 weeks high's. This means market is strongly bullish. A strong signal to trade only long side.



Though market gave a big move this week bringing both weekly and monthly charts to bullish direction. The up move was very high, testing resistance zones. Market has become over valued. I call a market over valued when the price is over stretched from the respective EMA's. Buying at this level gives more risk to the trade due to large stop losses and as well as the risk of retracement. So it is prudent to wait till market takes support at 3980 levels on Nifty Futures & a clear formation of bullish patterns.



There is no good picks for this week, to trade. Of some scrips which generated buy signals, the Risk/Reward is not very favorable. We give our recomendations here for other traders to have a view & do thier analysis on those counters, if found favorable, trade them.

Cipla: Buy above Rs. 223.85 with a stop of 204.60 for a target of Rs. 258.00

Hindustan Unilever: Buy above Rs.234.40 with a stop of Rs. 218.05 for a target of Rs. 263.



A humble request to all traders, please do not trade any picks without taking your personal view on them. Get comfortable with the pattern, entry price, stop and targets. Only then trade any position. We recomend a minimum of 1:2 risk/reward for any trade to be good. Our picks this week do not have 2R reward, as per our analysis.



Hence we stay away from trades this week, however we are keeping the market on watch, if there are any signals in the course of trades this week. We will trade them in our notional trade account.



Weekly charts of many Index front runners are showing key reversal patterns, which indicate immediate weakness. So a test of 3980 on index is emminent. We shall wait till then.



Nifty heat map of daily is showing 48% Index scrips closing lower on Friday, giving a indication of consolidation or weeker moves. Whereas the same on weekly is having 12% of Index scrips closing lower, indicating very high bullish strength in the market. There seems to be confusion in the market as different indicators are giving different signals.



So, "when in doubt, stay out" is the best option for this week.