Setback...
Major Indices: Sensex : 16739 Nifty : 5037
Intermediate Trend: Bullish – Stop 16111
Key Technical Levels : 17020- on the upside; 16390- on the downside
In the previous review, when the Sensex was at 16153, we had stated “post triangle breakout the control has been shifted in favor of the bulls & the intermediate trend has turned bullish; expect systematic buying instead of ‘euphoria”; near term target 17020 and then 17225”.
As perceived, the Sensex has moved up, cautiously. This rise was a complete setback for the bears. The actions were stock specific and the bulls were determined to turn the table. Our near term target of 17020-225 remains unachieved due to truncated weekend. The same will be achieved, probably, in this week itself.
Normally, any “trend” ending with a ‘triangle’ formation gives a sharp ‘thrust’ on the opposite direction of the breakout. Here, the thrust is on upside. We have already witnessed a rally of more than 1200 points in the last 5-6 trading sessions. This could be a tip of iceberg, if the bulls successfully defend the level of 16390 in the next few trading sessions. Else, the entire week could see a consolidation between 16600-16190, before deciding further course of action.
We remain bullish on the Indian equities for the short term as well as for the medium term; a near term target for the Sensex is placed at 17020-17225. Daily close below 16111 will warrant profit booking with a neutral view (Short term). The action for the week will be more of stock specific and non-index components may witness sharp rebound. Overall, very fertile period for the bulls, especially those who have formed incremental longs since our buy call (partial) at 14833.
BSE Bankex (8580)
The Banking index has suffered a loss of 42% {from the high of 12678 (Jan08) to 7316(Mar08)} in just 45 trading sessions; worst performance vis-à-vis broader markets.
Since mid-March, the index has consolidated (5 weeks) and in the process formed a “triangle” formation on the daily charts, which depicts a “accumulation” by the strong hands. Decisive break form the “triangle” suggests a upward thrust, may be up to 9200 in the near term.
The sector has already suffered a lot, in a short span. Hence a sharp fall, may be on potential bad news could turned out to be a “good” buying opportunity for the long term bulls, rather than selling. Stop near about 8100.
The Banking index has suffered a loss of 42% {from the high of 12678 (Jan08) to 7316(Mar08)} in just 45 trading sessions; worst performance vis-à-vis broader markets.
Since mid-March, the index has consolidated (5 weeks) and in the process formed a “triangle” formation on the daily charts, which depicts a “accumulation” by the strong hands. Decisive break form the “triangle” suggests a upward thrust, may be up to 9200 in the near term.
The sector has already suffered a lot, in a short span. Hence a sharp fall, may be on potential bad news could turned out to be a “good” buying opportunity for the long term bulls, rather than selling. Stop near about 8100.
