Sensex Technical View :
The expectation of Sensex crossing 15100 -15500 in near term is going for a toss it seems which was a little bias we had before the NSG deal etc . 14100 was broken on friday which is a very important level and 2-3 sessions below it would confirm the head and shoulders formation.
The pattern suggest a fall to 13100-13300 in that scenario.
The 61.8 % correction of 12500 to 15580 comes to around 13685. So the last major support is placed around 13700. Below which it would imply 13k and a threat to it.
Nifty Technical View :
For Nifty the similar head and shoulders pattern suggests to watch the 4200-4230 levels and is very close to break that. So a close below 4200 for 2-3 sessions would imply 4000 or lower levels. The 61 % level comes to 4120 levels.
Traders can continue to watch the 13700 level and be stock specific with strict stoplosses as the gap ups and gap downs are common place.
Investors those who followed the view at 14k-12.5 k and exitted at 15k + in particular stocks should continue to remain patient and wait for stock specific dips.
Medium term View :
As has been presented in the post below and in the presentation Come look into the future. Technically Sensex is closer to the end of the bottom out scenario which could happen around Sept/Oct or Jan 09. On a price basis 12500 could be the bottom or can go to a level of 11900 or + – few hundred points but what is more important is the breakout after the bottoming which we would be waiting for. Details in the ppt.
Investors should look to start buying in small lots and good quality stocks in dips closer to 13k or in a stock specific manner in the next few months and buy at regular intervals with a long term view and good returns in the next 1 year or more. Although sentiments may not improve in next few weeks/months but the returns would over a period of next 6 mths-2 yrs or sooner also.
Stocks to watchout for :
Reliance and Rpl as seen saw some selling and Reliance is close to 1920 and RPL hasnt touched 148 yet. But technically continue to look weak and breaking below 1920 could touch 1800-1850 and 140 ( below that next imp support is 110 ) for RPL. Investors can wait for those levels and start SIPPING slowly below 1900 and 150 for long term .
GE shipping has come down to 320 levels close to Jan lows. Traders can buy arnd 315 with a stop of 305 for a bounce back of 5-10 % and if it closes below 305 can short for 10 % … Either trade possible.Investors can look for 280 -260 if it does come for long term.
Chambl Fertilizers looks good for bottom fishing to buy around 63 or lower with a closing stop of 60 tgt 70-75.