Technical view by Nooresh

Sensex 13500 support for now……. Relax and Research!!

Sensex Technical View :

Lets have a few observations :
-- > The Head and Shoulders Pattern seems obvious but only issue is it can also see a test to neckline before achieving full tgts which point to 12k-12.7k. So next few sessions could be confusing with lot of volatility.
-- > Momentum line is broken so markets could well be set for a full retracement of the current move which comes to 13700/12700/11600 which are 23.6/38.2/50 % levels. The trend would not be smooth with relief rallies coming all through. Index could get ranged also.
-- > Short term support is now placed at 13500-13700 from where there could be some pullback rally possibility. Gap Support at 13500 and 23.6% at 13700.
-- > On the medium term as we had discussed before after a move to 14.5 k + ( mentioned at 9.5k-10k ) the index should get into a retracement of the entire leg. Ideally the retracement is generally in the range of 38/50% and an extra stretch may even go till 61% .
-- > Such a correction would be healthy consolidation and one wave of consolidation would be over. Sooner we do this better it is :)... Investors can again look to start pyramiding from 13.5k. Keeping in mind a possibility of 10700 also. So 13.5k/12.7k/11.6k would be levels to look for pyramiding. Simple pyramiding would be 100-200-300-500-800 and so on to accumulate.
-- > Traders can watch for relief rallies from 13500 to trade a bit here and there. A move below 13400 could lead to 12700 levels in extreme short term.
ABOVE ALL -- In FEBRUARY MARCH had mentioned about studying fundamentally sound stocks discussed a lot of them !! but did not get response and people were averse to taking investments and were left out. Yet again i believe July/August is yet a time to get back to some research and make strategies like pyramiding as per personal requirements.
Ever since 15.5k i kept on getting queries what to BUY etc etc ... I am tired saying WAIT so take your time lot many people might have actually bought more at 15.5k when i was suggesting generating cash and wait ! So be disciplined and now get back to work - Research and evaluate.
Stocks to watchout for :
Investment picks- But take only 25-40% exposure and keep positions open to add on further declines.
GTL Infra
One of my favorite stocks in the previous run which was recommended at 30 and went up to 100 + . Yet again around 32-28 partial exposure can be taken and keep position to add further. Short term bounce to 38 could also give trading gains.
The stock could provide a good entry point at 60 and 50 to take 20% and another 20% exposure with long term view. The stock can go back to 90-100 levels in next 6mths to 1 yr. Fundamentally very well placed.
Please do your own research. Fundamentally sound stocks though further research should be done !
Charts for trading levels were posted yesterday.Take your own call on stocks discussed below. My strategy is still to wait and watch.
DLF has broken below 290 and could see some support around 270 levels.
Maruti is the only positive looking chart for now. Keeping a stop of 1050 one can buy for 1150-1200 also. Even Hero Honda looks positive
Ind Bull Realty has cracked and could now be headed to 175-179 last support below which it could even go to 150.
Lanco and IVRCL have maintained strength all through but could be ripe for correction. So watchout for long side traders.

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Article by Nooresh Merani

Nooresh has written 2532 articles.

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