Cor­rec­tion be­low 33100

Money Times - - Trading On Technicals - By Hi­ten­dra Va­sudeo

Last week, the Sen­sex opened at 33710.14, at­tained a high at 33865.94 and fell to a low of 33108.09 be­fore it closed the week at 33314 and thereby showed a net fall of 371 points on a week-to-week ba­sis. The Sen­sex formed a Dark Cloud Cover can­dle­stick pat­tern, which sug­gests that a near-term mi­nor cor­rec­tion to side­ways volatil­ity is likely till the next break­out and close above 33866 is not wit­nessed. The Sen­sex sur­vived the stop loss of 33100 last week. The over­all strength is vis­i­ble but a mi­nor cor­rec­tion and volatil­ity can­not be ruled out. Strength will con­tinue above 33900 clos­ing.

Daily Chart

A cor­rec­tion on the daily chart was wit­nessed from 33865 to 33111 and it tested the Daily Re­ver­sal Value (DRV). For the last 3 trad­ing days, the fall stopped at the DRV.

A fur­ther deep cor­rec­tion could re­sume on a fall and close be­low 33100. Re­sis­tance is at 33485, 33582 and 33865. A rise to the re­sis­tance lev­els could take place from an in­tra-week per­spec­tive if an im­me­di­ate fall be­low 31100 is not wit­nessed.

Weekly Chart:

Weekly re­sit sance will be at 33429-33750-33865. Sup­port is at 33100.

On a fall and close be­low 33100, ex­pect re­trace­ment of the rise from 31081 to 33865. The re­trace­ment lev­els are placed at 32814-32468-32145. A cor­rec­tion could test 32814 or 32468 and move higher for con­sol­i­da­tion.

A fur­ther rally can con­tinue on a break­out and close above 33865. Till then, traders long can exit the same or book prof­its.

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

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

Weekly chart:

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

Monthly chart:

1-Month trend - Up 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 - Up 8-Week trend - Up Sup­port is at 16300. Re­sis­tance will be at 16606-16836. A fur­ther rally is above 16836 and a cor­rec­tion be­low 16300.

BSE Small-Cap In­dex

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

A re­ver­sal for deeper cor­rec­tion can be be­low 17300. Till then, a cor­rec­tion is an op­por­tu­nity to ac­cu­mu­late. Up­side mo­men­tum will con­tinue above 18033.

Strat­egy for the week

The Sen­sex sur­vived the stop loss of 33100 as it reg­is­tered a low at 33108 and closed the week at 33314. Traders long can re­vise the stop loss to 33100. The low reg­is­tered last week was 33108 against ac­cu­mu­la­tion points of 33527-33321. Traders may book prof­its at the weekly re­sis­tance of 33750 or above. Traders can trade long on a rise and close above 33866 with the low of the week as the stop loss or 33100, which­ever is lower.

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