Technical view by Nooresh

7700 … Can it be a short term or intermediate bottom.

Sensex Technical View :
Yet another big drop but good recovery by end of the day. Technically the candlestick pattern suggests a possible short term reversal pattern but next couple of sessions ccould give a confirmation. The lows of index Sensex 7700 Nifty 2252 are close to the lows made on 28 Oct 2005 which is exactly 3 years back from where we started the fastest move to 21k. In a matter of less then 9 months the index is back to the starting point.

In the short term we can term this to be a bottom as a recovery of 10 % from lows is not usual and is generally a sign of panic bottom. In the last few weeks we have seen that bounces have not lasted for more then 3-5 sessions so we could expect stability to set in once this pattern of panic is broken. In the long term chart 8400-8800 is important on monthly closing ( implies 20-25 sessions rather then calendar dates as per me ) . So trading bias should be on long side on dips to 8k with a stop of 7600 and a possible bounce to 9500/10500 , also shorting is better avoidable at 8-9k as risk-reward is highly unfavourable. Will see stock specific updates later tom if possible.

Resistances on upside are at 9500-9700 followed by that the most important level is 10750. On fibonacci retracements 9500/10500 are 23.6 /38.2 % zones.

Although as discussed 7600 is a support but not a strong one but the next one below 8800, but if markets have to turnaround this is the best possible place technically. According to a rough guess in my sms today is 7200-7800 and 2100-2250 which is a personal view. Also the market consensus is now going towards 6k and 2k then can markets possibly surprise ??? is the question.

Many of the investors /experts / analysts suddenly looking at 6k and 2k as good possibilities in the same manner as 10k which can be lot of greed or fear either ways but technically going to 6k would dent the charts and maybe the economy in such a manner that it would be very difficult to recover in coming months . As per my view if one is bullish in the long run buying at sub 10k is more better as 6k is much more scarier for the long term picture so personally i would be buyer at 8k then at 6k 😛 ! ...

Best Regards,



Article by Nooresh Merani

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