Technical view by Nooresh

Sensex … Time to increase cash in the portfolio.

Before we get into the current targets/projections  and more. Let us look back into the previous posts where in we pointed out the turnaround in markets and the super opportunity available at 9.5k-10k.
Click on links below.
Some of the important quotes in the above posts. 

"faster retracement move showing bull impulse after a long time and we are in next B wave of opportunity which will see 38/50 % of 8k-21k "

"Huge resistance around 10500-11000.a move beyond this would change the trend significantly. "

 "Sensex is currently in the B wave which is not a BULL RUN as dubbed by some Elliot wave chaps ( will speak on them in next post ). This move should touch 38/50% levels of the total fall from 21k. Corresponding levels are 12900/14500. This move in the extreme case also should not cross 15700-16k ( 61% level )"


Current Sensex Technical View :

-- > The targets for this move after the entry point around 9.5k-10.5k was said to be 12900/14500.Also an extension move should not go much beyond 15700-16200. 
-- > The maximum time period for the same was mentioned to be 10-13 months or sooner. 
-- > The targets have almost been achieved and we might be on the extension move to 16k band. The time taken has been 2 months only!! 
-- > Technically the current upmove should not go beyond the 61% correction level of 16.1k. A very optimistic target could also be 75-80% retracement to 18k + which i would like to rule out as the move has been quicker then ideal time period. 
-- > As i have mentioned before this move from 8k to 16k is not a BULL RUN and in ideal technical terms this is a consolidation phase which is the transition phase after the major correction. 
-- > Historically as per some thumb rules Bull Markets last for 5 years and Bear markets for 3 years. We might have seen 2003 to 2008 as one part of the bull market followed by which we have seen the Bear phase Jan 2008 to March 2009 and possibly we are in a transition and consolidation phase which may range from 8k to 18k. 
-- > As we have posted before our 13 year cycle in Sept 2005 which points to 25k/44k/77k by 2018. Do check the same by clicking here to download.
-- > Currently Sensex may try to make an extension in this band of 15.7k-16.2k or round about. After which one would expect a correction of 23.6/38.2/50% of the entire move from 8k to 16k. 
-- > The momentum trendline which we have been following ever since 10k as a stoploss or support level to buy on dips continues to remain an important consideration.A break below the same could point to a deeper retracement. 
-- > We can look into support levels of retracements once we can confirm a top in the extension target band ( shown in the chart as red ). 
-- > As of now the simplest strategy for us is to take some profits of the table and generate a good amount of cash in the portfolio which can be re - deployed at dips with a long term horizon. The exuberance ( distribution in cases )  may stay for quite some in the markets but as an investor/trader one needs to be disciplined !! 
-- > This strategy is mainly for the medium to long term portfolio. Traders will continue to get more stock specific opportunities on the long side but at 15.5k + levels one should definitely reduce trading volumes as i do expect volatility to increase. 
-- > Reduce trading volumes keep strict stoplosses and after a few more good trading sessions be ready to give back part of the profits back ---- Important line for traders now. 
-- > We may again review the levels in details once we confirm an intermediate top ( ya next top could be higher also but after a decent dip). 
-- > Also might discuss the above ANALYSIS in details in a WEBINAR in the weekend if possible which may also include more charts and technical details about global indices. Will try this new mode of communication ... Earlier videos at 16k cautioning exit helped.CHECK SENSEX ANALYSIS VIDEO at 16k 
NO STOCK UPDATES FOR TOMORROW  ...............Its not necessary to trade everyday ! 
Have a re-look into your old portfolio and current positions consolidate, re-shuffle , make a list of junk stocks to dispose, list of over run stocks to reduce exposure, list of stocks to deploy cash on dips and finally create good amount of cash and a focussed portfolio of stocks you are convinced of. 

( the course is meant to make you independent and be able to analyse in the simple manner as i do.) 


Interested participants can contact as early as possible to confirm your seat - 09819225396 
Best Regards,


Article by Nooresh Merani

Nooresh has written 2532 articles.

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