BSEIndia: All Stock Market News: [sharetrading] Technical Analyst, Hitendra Vasudeo:

Sunday, November 22, 2009

[sharetrading] Technical Analyst, Hitendra Vasudeo:

Technical Analyst, Hitendra Vasudeo:

Last week, the Sensex opened at 16893.11 attained a high at 17098.79 and fell to a low of 16635.75 before it finally closed the week at 17021.85 and thereby showed a net rise of 173 points on a week-to-week basis.

The Friday's recovery towards the closing at 17021.85 was encouraging from its low of 16635.75. As a result, the Sensex has gained strength for the immediate near term, which can attempt to test the recent high of 17493 at least and may be 17735 to an outer extent.

We are, however, still in the resistance range of the long-term quarterly chart. As indicated in our earlier market updates, the low of the December 2007 quarter was 17144 and the major lower top after the peak of 21206 was 17735. This resistance band of 17144-17735 has still not been crossed since mid-September 2009. The low of 16635.75 on Friday becomes the immediate trading higher bottom after the low of 15530 made in the first week of November 2009.

In our earlier updates, we had indicated that the inverted head & shoulder looked like a W pattern; the breakout point of this pattern was in the range of 15579-15600. The Sensex did violate the range but has managed to close above it and sustain above it in the last two weeks. The recovery on Friday shows that bulls are still in contention to rally the market and are not yet out. They are waiting at the sideline to bounce on the bears at a suitable opportunity.

Last week our support levels were 16635-16360-16147. The Sensex, last week, tested the first support of 16635 by making an exact low at 16635 and recovered from it on Friday itself.

Weekly support will be at 16918-16738-16635. Weekly resistance will be at 17201-17493-17735.

Conclusion

Last week's low is the important support and stop loss point for all long positions from the short-term angle. From the medium-term angle, 15330 will be the major support point. Last week's low was 16635.

Strategy for the week

Exit all long positions on any pull-back rally that is witnessed to resistance levels or above to 17500 and 17745. Traders and short-term investors can keep a stop loss of 16635 and medium-term investors can keep a stop loss 15330 and look for a rise to 17500 and 17735 to book profit or exit long. Traders can trade long for a rise above 17500.