Rise continues above 31522 closing
Last week, the Sensex opened at 31156.03, attained a low of 31017.10 and moved to a high of 31460.69 before it closed the week at 31360.63 and thereby showed a net rise of 439 points on a week-to-week basis.
After oscillation around the Daily Reversal Value (DRV) in the last fortnight, the Sensex closing deviated up from the DRV last week, which suggests a direction movement along with the higher high and higher low concept. The Sensex is back testing the last peak of 31522.
At some point last week, it seemed that the Sensex could go in for a deeper correction if it sustains below 30680 but instead it moved higher above the DRV.
Expect resistance around 31522 since profit-booking pressure cannot be ruled out around 31522. On a sustained rise and close above 31522 with a bullish candle, expect the Sensex to move higher towards 32038 at least. It may scale up to 32889.
We have seen 5 Bars since the low of 30680. Of the 5
Bars, we witnessed 3 Up bars with higher high and higher low. The bias is up on the daily chart till the net count of Bars is positive. The net Bars are +3 on the bias theory.
The weekly chart marks a swing higher bottom as a result of the higher low and higher high on the weekly chart in relation to the week that ended on 30 June 2017. The weekly close was the highest weekly closing ever till now. Overall, a breakout and close above 30024 has been witnessed and the Sensex is living a life above 30024 and
getting habituated to sustain at higher levels with minor volatility.
As a result of a breakout above 30024 witnessed in the year 2017, the Sensex is eventually moving towards 34600 with intra-day, intra-week and intra-month correction at times on its road towards 34600. Support is at 31279-31098-30680. A deeper correction could resume below 30680 and as long as 30680 is not violated, the market may continue to move higher with volatility.
Trend based on Rate of Change (RoC) Daily chart:
1-Day trend - Down 3-Day trend - Up 8-Day trend - Up
1-Week trend - Up 3-Week trend - Up 8-Week trend - Up
1-Month trend - Down 3-Month trend - Up 8-Month trend - Up
1-Quarter trend - Up 3-Quarter trend - Up 8-Quarter trend - Up
1-Year trend - Up 3-Year trend - Up 8-Year trend - Up
The ROC up trend has been restored on the weekly and monthly charts. On the daily chart, the ROC trend of 3 and 8 days is up, which suggests that an upside momentum may continue in the immediate near-term.
BSE Mid-Cap Index Weekly chart: BSE Small-Cap Index Strategy for the week
1-Week trend - Up
3-Week trend - Up
8-Week trend - Up
An upside momentum was restored as the trend line breakout is not visible on the weekly chart. Expect the peak of 15122 to be tested.
On a sustained rise and close above 15122, expect a rally to 15820 and 17000. 1-Week trend - Up
3-Week trend - Up
8-Week trend – Up
A new high on the BSE Small-Cap index was registered suggesting an outperformance from small-cap stocks and index. Expect the BSE Small-Cap index to move higher to 16500 and 17735. A weak opening and correction during the week 31279-31098 can be used for accumulation with a stop loss of 30600.