Profit Booking comes in finally …
Sensex Technical View :
-- The doji candle on the daily charts has been followed by a bear candle and completes the evening star formation for near term which suggests an extreme short term trend reversal.
-- From the fractal pattern the next move i.e dip and bounce becomes the most important thing to look for -- CHART
-- If we consider 10127 is a short term top and close to the 10200-10500 wall zone then we should see a retracement of 38/50/61% of the pullback from 8047. These levels come to 9320/9080/8840 roughly. Such a move should not go below the 61% level ideally. Giving a margin below that we would watch 8700 as a level as a trend decider for next couple of months.
-- The triangle pattern and time analysis pattern are no more into play as min tgts of 8300/7700 were not fully achieved and the time period of March end is over. Now we need to watch for the upside breakout if it has to happen above 10500.
-- If we go above 10500-10630 on closing basis then it would signal a turnaround and may confirm a bottom formation at 8k levels and we should see a full 38/50/61% retracement of the entire move from 21k -8k !!!!!!!! CHART HeRE.
-- The first indicator of bull strength is an upmove which is higher then previous high and is achieved in lesser time period. We did see this indication in the move of 9700 to 8047 in arnd 15-17 sessions was covered in less then 12 sessions ( 8047 -10127 ).
-- Now similarly if we take the major leg 10470 ( this was our time analysis top ) has taken around 40 odd sessions to reach 8047. So to get out of the bear pressure the index needs to move beyond 10470 by May 1st week. This if achieved then we would confirm the bottom of 8k is in place and may remain for a very long time to come.
Stocks to watchout for :
Bharat forge only triggers above 98 and shoots to 107 still looking good. ACC guj ambuja on watch. SCI and Ge shipping still good for short term.
The stock is making the second attempt to crosss 200 dema. If crosses 590 expect the stock to touch 650+ in short to medium term.
Good volumes after consolidation can be bought on dips to 184 with a stop of 177 for short term tgt of 198-207
The bottoming out process seems to be over for the stock and a move beyond 390 would imply a move to 420-460 levels in extreme short term. Low vols stock so position accordingly.