Technical view by Nooresh

Real Estate bounces … Sensex bounces to 9450 zone…. Can it cross and stay ??

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Sensex Technical View :

Sensex manages to pullback yet again to 9400-9450. Technically sustaining above 9450 for 2 sessions could suggest a test of the downward triangle trendline which is around the 9900-10100 zone. 

In the last few weeks we did see a possible triangle breakout on upside as well as downside but volumes were lacking as well as confirmatory moves so traders need to be nimble to switch positions or trade with strict stops and small targets till market doesnt find a clear direction in near term. 

On the longer term time analysis in my posts in previous months had always mentioned the importance of the 8th and 13th month zone which would be uncertain as a major bottom is generally seen around these periods. Although we expected a bottom close to 9.7-11.5k in October but we saw a much larger correction in line with economic conditions which have been much more then thought at the start of the downtrend. 

Yet again we are around the 13-14 mth ( Jan mth was top ). So ideally a re-test of previous bottom or a formation of a major bottom and uncertainty on price terms would remain high. The next important fibonacci month zones comes around 21 mths. So investors would be better of watching the next couple of months or buy in a pyramid manner or a staggered manner only in major declines or take a fresh view after March for a very long term scenario. A good clarityand new thought process looking towards the future  would emerge in this period as pointed before in  all my previous discussions. 

Will continue to monitor the situation technically on short term till then as upsides are capped at 10500-10900 ideally. 

Stocks to watchout for :

Bhel has broken below 1300 giving indication of weakness, Rcom 148 and 190 is the range to watch,GNFC dint do anything. 
Real estate stocks gave a good 5-12 % bounce of the stocks discussed but yet again the sector remains a risky proportion ( performers of previous bull runs have a tough time ). 

ITC and Colgate seem to be catching in on the FMCG strength displayed by HUL which is the only stock near 52 week highs. Can they continue to build up to the small moves is the thing to watch.

ONGC would face resistance around 670-675 can be a short trade with a stoploss of 680.  

Crompton Greaves looks weak if stays below 124 could well tgt 100-110 in that case. Watch for volume support. 

Article by Nooresh Merani

Nooresh has written 2531 articles.

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