Technical view by Nooresh

10700 is here … What next 9900 or 11400-11700 ??

Sensex Technical View :
The day after we made the low of 7700 following lines were the technical view :

"""" 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.

Resistances on upside are at 9500-9700 followed by that the most important level is 10750. """

So What NEXT !!!

Technically as said 10700 is an intermediate resistance and markets can very well go to 11650/12500 also in weeks to come as every major bear rally generally touches 50/61.8 %.
On the time front the phase of counter bear rally could last 20-40 sessions also or say 4-6 weeks also possibly.

Sensex does look overbought with 3 gap ups and has resistance at 10750. But as was mentioned at 8k when mkt consensus was for 6k markets could surprise. Yes it has surprised lot many people with the 40 % rise but thats what markets are all about. The view was 9700 minimum and 10700 in one quick impulse which is done.

From here technically indices are overbought but they can remain so for quite some time as they did below 11k. The two technical possibilities now are gap filling area at 9900 -9500 or 11400-11700 . The probability on either side have equal weightage it seems as counter bear rallies can surprise on upside too.

One needs to be highly stock specific and if holding a good amount of longs then can hedge or go with strict stoplosses. Booking should be done for stocks bought at lower levels. Many of the stocks discussed on the blog have jumped around 20-50 % so taking profits is a must and then wait n watch or trade with short term bias.

Stocks to watchout for :

All the stocks discussed as bounce backs in last 3-4 sessions have given 20-25 % bounces or even more so will wait for new picks as many have already run up. New ones if any would be based on intra day triggers so difficult to put here.

Possible Short trades : ( go with the trend and strict stops and cover partly on small dips to reduce risk )

Bharti Airtel around 730-738 with a stop of 753 tgt 700 -675.
BHEL around 1440-1470 stop of 1510 tgt 1380-1320.
Hindustan Unilever around 250-253 stop of 257 tgt 235.

Best Regards,



Article by Nooresh Merani

Nooresh has written 2531 articles.

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