Technical view by Nooresh

Bounce from 16200 as expected !!

Sensex Technical View :
Day before yesterday a chart was posted suggesting markets would get into a downward channel and we could see a bounce from 16200 to 16600-16800 range to fill up the gap at 16626. As expected took support at that level by making a low at 16218 and bounced to 16550 + already which is 300 points from the low. The current pullback would face resistance at 16700 /16900/17250. Rise to above levels would only be a bounce in the downchannel and not a rally . Only on crossing and sustaining above 17300 we can term it to be a change of trend which right now should be a slow decline.

Strategy for traders should not be to take long exposures at higher levels , day trades or quick trades should be only for a limited bounce and exit quickly. Investors can wait either for 15300-15800 or below for putting cash back or they can take commitments only if we see a turnaround above 17300 or more in comfort.

Stocks to watchout for :
Spice tele does 54= tgt and can do lil more but booked almost fully , Videocon Inds is a long term story accumulate slowly ... IOl netcom , Mold tek do homework before u take exposure...
Message sent to clients :

28-May-2008 10:33:52
Spice Tele 48 trail stop.16200 if holds we could see a bounce to 16500-16700 possibly keep trailing stops in Punj Lloyd short.

IT stocks have strengthened and could see a bit more upmove ... Infosys if sustains 1925 should tgt 2000-2050. Satyam can tst 525-530 zone on upside. Its a trading move and a long term basis would not recommend taking exposure in IT at current levels as its a move based on dollar move and not business developments. On a longer term basis people holding on to IT should reduce exposure at higher levels from now on !!!!

Tata Communication i.e VSNL looks good for 570+ if sustains above 525-530 levels.

tata chemicals for 421-431 , Punjab Chemicals 10 % are risky day trades which one can take.


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Article by Nooresh Merani

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