----- Original Message -----From: Pradip KenkreSent: Tuesday, January 01, 2002 6:10 AMSubject: [sharetrading] Technical Analyst, Hitendra Vasudeo:
Technical Analyst, Hitendra Vasudeo:Last week, the Sensex opened at 17067.14 attained a high at 17290.48 and fell to a low of 16210.44 before it closed the week at 16632.01 and thereby showed a net fall of 389 points on a week-to-week basis. The support and stop loss of 16635 was violated and the low made was 16210.44. It recovered on Friday to close at the breakdown point at 16632.
As a result of last week's movement, the Sensex has formed a weekly downward bar reversal and an Engulfing Bear candlestick pattern. As a result of this pattern, we can expect a near-term slide towards the lower range. Only a breakout and close above Sensex 17500 could salvage the bulls who are banking on the Inverted Head and Shoulder pattern for the medium to long-term. A fall and close below 15330 could end all hopes of the bulls. Till then, they would keep fighting with the bears, who do not want the market to go beyond Sensex 17500. If that happens, then the bears will run helter skelter.
The Sensex range of movement is 17500-15530, which was created in the last couple of months. But the price range above 15530 has been in existence since mid-September 2009. In short, we are just oscillating and going nowhere if you examine the range for the past three months.
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.
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 and is still above it, which keeps medium-term bulls alive.
Conclusion
From the medium-term angle, Sensex 15330 will be the major support point. From the traders' angle, if support of 16100 is violated then further weakness could be seen. Finally, a breakout and close above 17500 is a must for the medium-term survival of the market. Till 17500 is not crossed, the market will develop a downslide with volatility. The rise can be more of a sucker rise till Sensex 17500 is not crossed.
Strategy for the week
Exit all long positions on any pull-back rally that is witnessed to resistance levels or above Sensex 17500 and 17745. Traders and short-term investors can keep a stop loss of 16100 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.
Happy Trading,
United we grow!!!
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