Technical view by Nooresh

Bounce fizzles out…

Sensex Technical View :
Sensex almost kissed the upper end of the flag and has turned back to close in the red. The drift in the down flag continues with no clear direction. The simplest thing to do now would be to wait for a breakout above 9300-9500 or a dip below 8300 -8200 to take a fresh view in short term.

Till then all the trades on the index or out of the index should be for intra-day or extreme short term be it long or short.

Technically i had expected a bottoming out arnd 8 or 13th month zone. we are through 8-9 mths already and next 3-4 mths would be the real challenge for the Sensex and investors/traders with gr8 intermediate opportunities !... So best of luck to all as the real test is here it seems...

Index Stocks and observations :

None of the large caps have actually given a fresh buy or a sell signal with confirmation and are poised crucially. HDFC Bank and SBI charts have been shown. Reliance inds 1000 -1030 is crucial. Tata Steel is almost near to oct low or abt to break it. The next couple of weeks would decide whether these stocks give a clear signal.

Stocks to watchout for :

Of the stocks suggested for bottom watch Praj , Unitech, Aditya Birla Nuvo , Unitech gave small bounces whereas Punj Lloyd has broken the low.

Punj lloyd if sustains below 140s could well touch 120 zone.

NALCO above 193 could see some move.

Market Observations and Thoughts :

The last few weeks since October whosoever i meet on the street remains very very bearish on markets , businesses etc. But one thing which has amazed me is the words , belief are not matching their actions. Lot many investors are speaking gloomiest words but not selling but in cases are actually adding to a junk portfolio. Although restructuring is what is the best thing to do on rallies.

Just a dummy conversation would clear the scenario lot many investors are faced with.

Wise mkt -men: Where do u think is the Sensex headed.
Investor : Ah ye to 6k-8k ho jaayega aur wahi rahega.
Wise mkt-men : So what are u gonna do or wat did u do.
Investor : Nothing just watching my portfolio sink to 30 % value. I no more have the guts to buy.!!!
Wise mkt-men : The guts are needed to sell .... Did u sell at 17k , 16k , 14k .Although u were bearish all through and u still are.
Investor : Ab kya karu itne loss me kaise bechoo ...
Wise mkt-men : All u can do is better have guts next time around to buy !!! as the next gut -challenge is coming in next 3-4 mths which will not be about selling !!!.

Lay Long term investors sell in panic not in loss.....

Best Regards,



Article by Nooresh Merani

Nooresh has written 2532 articles.

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