Sensex Technical View :
9700 has come finally ... But thats a fibonacci retracement and not a strict support . Fibonacci calculation suggests markets could correct to the extent of 61.8 % or nearabouts. The most strong technical support is placed around 8800/2600 for Sensex /Nifty.
On the short term we are seeing contraction of prices and maybe indices can start making a falling wedge pattern( will put up the chart in the weekend ) . But still such a pattern has been seen on hourly charts which suggest 9500 if holds the pattern remains but a breakout can happen only above 10500 which could give a small spike. We need to see some reversal patterns being made on daily charts which can develop in next couple of weeks when the index tries to stabilize between 8800-9700.
So continue to wait for some reversal signals and watch patiently ...
Stocks to watchout for :
Hindalco has come down to attractive levels technically ---
1998 low --- 40 levels
2001-2003 -- 48-51 levels
Currently quoting at 51-55 range.
Although i dont have any fundamental study on the stock but this is one of the blue chip cos which seems could stable out around these zones and can give a decent bounce back in medium term . Can buy in 3-4 parts starting 25 % now and be slow and keep a view of 3 mths to 2 years . Do your own research as this is a technical observation. Also TISCO could be good in the 185-150 zone similarly.
Stocks to watchout for :
All the short sell charts Bhel , Nalco , bharti airtel are nearing tgt zones. LIC has still not broken .
The other possible long trades have not crossed the levels so no initiation. Balrampur Chini and IFCI are nearing lower support levels to initiate small lots of buying but do your own research as there are many stocks which look cheap fundamentally ! .
Market Observations and Thoughts :
Price discovery by markets are always better then economy boosts and are not short-lived !!! and it doesnt seem far !!! ...
This is what i believe is needed for a good bottom formation in bear markets. There are lot many external interventions like crr , p-note selling considered to be good news which i felt could boost sentiments but have not boosted market levels and every news is being sold into. Purely with a technical view a bottom is well made by a price discovery mechanism of the markets itself. Also a good bottom indicator RSI is almost nearing a level which it was in 2001-2003 on monthly basis which suggests markets are getting into highly oversold zones. So its better to watch the markets for the signals then look towards any external interventions and reasons.
So ideally once there is a lull on external side followed by a price rise which is entirely due to markets could give more confidence then some economy boosters. Lets see how it pans out but just a brief and a quick thought.