Cover short po­si­tions

Money Times - - Trading On Technicals -

Last week, the Sen­sex opened at 34412.35, made a low at 33723.53 and moved to a high of 34858.35 be­fore it closed the week at 34733.58 and thereby reg­is­tered a net rise of 356 points on a week-to-week ba­sis. A re­cov­ery can­dle was seen, which soaked the sell­ing pres­sure last week.

Daily Chart

A swing bot­tom ap­pears to be in place, which sug­gests a near-term rise to DRV-35684. Weak­ness may re­sume be­low 33723. Till then, a weak open­ing or cor­rec­tion dur­ing the week could soak the sell­ing pres­sure. The mar­kets will keep re­cov­er­ing un­less a sharp slide be­low 33723 is seen on a clos­ing ba­sis.

Weekly Chart

Sup­port lev­els are placed at 34438-34018-33723. Higher range for the week is 35153-36288. Higher low and higher high this week with a bullish can­dle can set the rise for re­trace­ment of the fall from 38989 to 33723. Re­trace­ment lev­els are placed at 35716-3633337024.

The last ma­jor bot­tom wit­nessed was 32484. The de­mand zone at­tached to it on the weekly chart is 33354-32484. Over­all, the lower range has sup­port and even if 33723 is vi­o­lated, the de­mand zone on the weekly chart may try to soak the sell­ing pres­sure.

BSE Mid-Cap In­dex Weekly chart:

Sup­port was seen at 13632 as the low and close reg­is­tered last week was 13538 and 14286 re­spec­tively. Weak­ness will re­sume be­low 13538. Post 09/10/2018, mid-cap par­tic­i­pa­tion on the daily chart has im­proved pos­i­tively. A pull­back re­trace­ment could see a rise to­wards 14876-15283-15681.

BSE Small-Cap In­dex Weekly chart:

Weak­ness will re­sume be­low 13396. Small-caps wit­nessed buy­ing from the lower range even though the Nifty saw a gap-down open­ing on Thurs­day. Re­sis­tance will be at 14325-14586. A pull­back rally could re­sume on a break­out and close above 14586.

Strat­egy for the week

Last week, the Sen­sex made a low of 33723 due to sell­ing pres­sure. But buy­ers emerged and soaked the sell­ing pres­sure to show an in­tra-week re­cov­ery.

Traders may cover short po­si­tions at 34733 or be­low as bulls are try­ing to take charge of the mar­ket. Fur­ther sell­ing will be seen be­low 33723. Traders short can main­tain their stop loss of 34900.

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