Sup­port to be un­der pres­sure

Money Times - - Trading On Technicals - By Hi­ten­dra Va­sudeo

The ef­fect of the Dark Cloud Cover can­dle­stick pat­tern was vis­i­ble last week till Thurs­day. The weekly up­date of last week in this edi­tion is based on Thurs­day, 28 Septem­ber 2017.

The move­ment of the Sen­sex on Fri­day, 29 Septem­ber 2017, could be crit­i­cal for the next week be­gin­ning Tues­day, 2 Oc­to­ber 2017. From 2 Oc­to­ber 2017, if the Sen­sex sus­tains above the high recorded on 29 Septem­ber 2017, then a pull­back could re­sume but if it breaks the low, then the slide could con­tinue.

The low of 31128 was crit­i­cal and on Thurs­day, the Sen­sex recorded a low of 31081 be­fore it closed at 31282. There­fore, the crit­i­cal sup­port zone can be 31128-31081 for the near-term.

The next sup­port will be at 30680.

The demand zone on the weekly chart will be at 3068031294.

As long as the Sen­sex re­mains or con­sol­i­dates in the demand zone, the Sen­sex can still at­tempt to test back the peak.

Vi­o­la­tion of 30680 in the week to come will con­firm a deeper cor­rec­tion. The cor­rec­tion will be of the rise from 25753 to 32686. The re­trace­ment lev­els for the cor­rec­tion will be placed at 30333, 29248 and 28401.

The last top of 29077 was crossed for a rally to 32686. This ear­lier top of 29077 could pro­vide re­sis­tance but it must not be breached on a clos­ing ba­sis in time to come.

Daily Chart:

A Head and Shoul­der pat­tern is be­ing wit­nessed with a break­down from the neck­line, which im­plies a slide to­wards 30000.

The 38.2% re­trace­ment is around 30333 of the rise from 25753 to 32686. Sup­port at the cur­rent level to 30680 is crit­i­cal in days to come.

Weekly Chart:

A break­down was al­ready wit­nessed and if a pull back is seen, then it can be an in­tra-week rise to­wards 31460-3183832016.

A rise and close above 32016 will help to even­tu­ally pro­vide a break­out above 32673.

Mo­men­tary fo­cus is on whether the Sen­sex sur­vives the cur­rent sell­ing pres­sure from the cur­rent level to 30680. The mar­ket needs to ab­sorb the sell­ing for con­sol­i­da­tion and not al­low sharp sell­ing pres­sure to break the sup­port.

Trend based on Rate of Change (RoC) Daily chart:

1-Day trend - Up 3-Day trend - Down 8-Day trend - Down

Weekly chart:

1-Week trend - Down 3-Week trend - Down 8-Week trend - Down

Monthly chart:

1-Month trend - Down 3-Month trend - Up 8-Month trend - Up

Quar­terly chart:

1-Quar­ter trend - Up 3-Quar­ter trend - Up 8-Quar­ter trend - Up

Yearly chart:

1-Year trend - Up 3-Year trend - Up 8-Year trend - Up

BSE Mid-Cap In­dex Weekly chart:

1-Week trend - Down

3-Week trend - Down

8-Week trend - Down

Ef­fects of an En­gulf­ing Bear can­dle­stick pat­tern was wit­nessed and could ex­tend the slide to 14726-14484. Ex­pect a con­sol­i­da­tion at­tempt at the lower level around WRV-14906.

BSE Small-Cap In­dex

1-Week trend - Down 3-Week trend - Down 8-Week trend - Up

The ef­fect of En­gulf­ing Bear can­dle­stick pat­tern was wit­nessed. Ex­pect cor­rec­tion to­wards WRV-15445 for con­sol­i­da­tion.

Strat­egy for the week

The Sen­sex did test 31128 as ex­pected and the low was 31081.

A down­side mo­men­tum will con­tinue on a fall and close be­low 31081. Traders long need to exit on a rise to 31460-31838-32016 as an when an op­por­tu­nity arises. Lower range for the week can be 30904-2969.

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