Sensex (13635):
Intermediate trend: Sideways: Stop: 12835(cl)
Last Week’s Highlights
Our Comments: The trend is bearish & the Sensex is heading towards 12.8 to 12.4k levels. Intermediate trend of the Dow is bearish and likely to continue till 10660; but if closed above 11230 then expect a corrective rally upto 11434/11556. The Nikkei is heading towards target objective of 12754-12550. For the SSEC, close above 2955 is must for recovery, else range trading between 2850-2700.
Actual Movements: The Sensex, indeed, fallen sharply to a new low (2008) of 12514 which was almost near to the target. The Dow tested 10827 i.e. close to the target area and bounced back above 11230 confirming corrective rally. The Nikkei tested 12671 thereby achieving our initial target of 12754. SSEC failed to surpass 2955 and continued its sideways trading.
Current Week Previewed
Highlight: The down trend is halted in case of Sensex/Dow/SSEC. Expect corrective rallies towards 14197/11890 & 3200 in the near future. At the same time volatile and sharp cuts are not ruled out in the extreme near term, but such downswings could be an opportunity to form longs rather than short positions. The Nikkei has to trade above 13150-13185 for a corrective rally.
Detail analysis:
The Sensex had bounced back from near to our target area of 12.4k. The sharp recovery (that to) from the technically important area could be an indication of the revival of the trend, at least in the medium term.
The recent fall from 17735 had consumed 10 weeks. Being corrective rally to that fall, the current rally could last more than 10 weeks As such the recovery could be “slow” & “complex” affair rather than a straight upward rally. See chart for earlier corrective phases, the corrective rallies were consumed more time than the time taken for the corresponding down moves.
As such buying on sharp cuts rather than sharp rallies would be a more profitable strategy in the near future. In the immediate short term close above 13750 is must to continue the bullish momentum of the last 2 trading sessions. If failed to surpass 13750(close), immediately, expect a retest of 13k levels once again & that could be an idle opportunity for the bulls to form long positions. On the upside, the Sensex has to clear previous hurdle (Gap down) area of 14127-14197 and then 14520 for sustainable rally in the near future.
In short, after taking hit of over 29% since May 08(17735), the Sensex has stabilized near 12.5-12.8k area. Our proprietary tools suggest continuation of the fall from current level is unlikely & market is ripe for corrective rally. We have already witnessed bullish action, as a part of corrective structure, in the last 2 trading sessions. Position your trades accordingly.
The Sensex had bounced back from near to our target area of 12.4k. The sharp recovery (that to) from the technically important area could be an indication of the revival of the trend, at least in the medium term.
The recent fall from 17735 had consumed 10 weeks. Being corrective rally to that fall, the current rally could last more than 10 weeks As such the recovery could be “slow” & “complex” affair rather than a straight upward rally. See chart for earlier corrective phases, the corrective rallies were consumed more time than the time taken for the corresponding down moves.
As such buying on sharp cuts rather than sharp rallies would be a more profitable strategy in the near future. In the immediate short term close above 13750 is must to continue the bullish momentum of the last 2 trading sessions. If failed to surpass 13750(close), immediately, expect a retest of 13k levels once again & that could be an idle opportunity for the bulls to form long positions. On the upside, the Sensex has to clear previous hurdle (Gap down) area of 14127-14197 and then 14520 for sustainable rally in the near future.
In short, after taking hit of over 29% since May 08(17735), the Sensex has stabilized near 12.5-12.8k area. Our proprietary tools suggest continuation of the fall from current level is unlikely & market is ripe for corrective rally. We have already witnessed bullish action, as a part of corrective structure, in the last 2 trading sessions. Position your trades accordingly.
“Technical analysis….its not ‘science’; it’s an ‘art
