Technical view by Nooresh

Charts turned GREEN at 10k !! …Statistics see greenery only after 16k !!

Sensex Technical View :

Knock ! Knock at 16k.
After a massive correction all through 2008 Sensex is back to 16k a level which was broken in May 2008. The fall below 16500-16000 opened the gates to the Bear market phase.
Do look into the video analysis posted that time --- CLICK HERE for YOUTUBE video.
So with lot many instances pointing towards a level of 16050-16500 to be a stiff resistance to watch in coming days. A move beyond 16500 also points to a possibility of 17700 in medium term.
But always the last leg of the upmoves are distributive in nature/lower volumes/ lower highs and the markets can keep meandering sideways for a more amount of time. Traders need to be cautious above 16500 and look for stock specific moves and be very strict with money management !!
The expectations are many analysts / funds will soon start re-rating stocks with higher targets with Fy 10-11-12 based valuations. If you are buying on such reports just do a search back !! and things will be more real.
Stocks to watchout for :
OFSS targets achieved,maintain bullish stance on RCOM , PFC and Rolta.Alstom if crosses 550 and stays.
AUTO ANCILLIARY STOCKS ROCKED !!!! --- yes last weekend had mentioned about them ... Everything from Bharat Forge to Munjal Auto to Amtek Auto to Bharat Seats have moved up 20-30% !!....... Technical Timing though we were only on one stock :)
Sterlite , Indian Bank and GPIL charts posted below.
Some possible short term ideas .... Take ur own call with mkt conditions
Kotak Mahindra Bank Buy if stays above 684 stop of 670 tgt 700 +.
Hind Zinc buy with a stop of 723 tgt 765-790 in 1 week. ( high risk traders only )
Day trade Buy RCOM above 295 stop of 288.5 tgt 305-310. SAIL buy above 180 stop of 177 tgt 186-189.
Momentum trades for quick players Unitech above 98 and Reliance Capital above 920
The current spike in the index has actually increased morale of lot many businesses apart from the portfolio of a market participant.
Suddenly there is a Volume spike in Sales of various goods , Housing and related consumer products. At the same time for manufacturing the inventory which was cleaned up till March quarter is now leading to fresh orders of materials/equipments and also the low cost of the acquisition is increasing margins of many businesses.
But all the green shoots or watever the economist term is looking more greener with lot of acceptance but the market is already up 100% from the lows !! Can we term this a vicious cycle where market leads the way ??? Sets the sentiment for growth ?? .... Its all confusing but simplest thing is MARKETS showed green shoots at 10k ( TECHNICALLY ).
Many people are suddenly gung ho about earnings growth at X % Q-0-Q and Y-0-Y which has been seen in past two quarters.Mathematically a recovery is mostly seen coz of BASE EFFECT ( of low earnings in weak recession qtrs ). So we still have to see demand and growth come back which ideally would in India but will take time. So keep your suspicions open to all statistics :) to keep you cautious then optimistic !!.
The financial markets always look easier to predict in HINDSIGHT !!!
( every other person now says it was so simple making money here .. i shud have bought at 8k/10k/12k !! ... Is it so simple ?? )
ANALYSE INDIA seminar - August 9th
‘SENSEX – the next MULTIBAGGER’ …a technical view
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Article by Nooresh Merani

Nooresh has written 2531 articles.

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