Sensex Technical View:
The crack has been much deeper and faster then expected though a possibility of 10% correction and re-test of channel was considered many a times but not in such quick time.
This suggests index may now get into a tight range of 18800-19800 for some time.
As i have been maintaining the longer term bullish stance and a worst case dip to 18500-18800. Many people might start getting fearful with the correction and start re-collecting 2008 !. But in simpler terms its a CORRECTION not a Crash and what we may see is a similar impulsive upmove over the next few months.
In the last few corrections Sensex has dropped around 2000-2400 points from the top or a max of 12% for an average 20-25 sessions.
We are down 2150 points or 10.1 % down with 15 sessions done. If we have to stick with the time cycle being followed then we might be through with the bottom by mid of dec and a strong recovery could follow. But time cycles are not a strict technical study so one needs to wait and watch for further confirmations.
I stick to my view of deploying cash at 18500-19000 or even fresh money with a medium to long term view. A few months later the current difficult phase would seem like yet another missed opportunity. Although quite a lot of stocks which we picked some weeks back are down 15-20% investors can look to average the same. ( I did not expect the correction to be severe on the broader market so did not advise much of an exit this time around like we did at 17.5k-18k tops before)
The medium to long term view changes only if 17800 breaks.
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