Re­sis­tance at higher range

Money Times - - Trading On Technicals -

Last week, the Sen­sex opened at 38348.39, reg­is­tered a high at 38354.52 and moved to a low of 37342 be­fore it closed the week at 38090.64 and thereby showed a net fall of 299 points on a week-to-week ba­sis. Once again last week had an in­tra-week fall from 38389 on Fri­day, 7th Septem­ber, to 37342 and re­cov­ered at close to 38090 thereby trim­ming the fall and cre­at­ing a lower shadow sug­gest­ing sup­port at lower level as sell­ing con­tin­ued for the sec­ond week in suc­ces­sion.

Daily Chart

A new up-trend sur­faced on Fri­day as the Sen­sex had fallen be­low the DRV since last week. A pull­back of the fall from 38989 to 37342 is in progress and may test 61.8% re­trace­ment level which is at 38354. On Fri­day, we saw a gap up open­ing that con­tin­ued up for an in­tra-day rise. A swing bot­tom is in place for a pull­back to re­sis­tance lev­els at 38098 and 38348. Fur­ther up­side mo­men­tum will con­tinue if it sus­tains above 38422.

The Sup­port gap is at 37859-37342 and the sup­port from the swing bot­tom low of 37342.

Weekly Chart

Re­sis­tance will be at 38354-38934. Sup­port will be at 3777437342.

Down­side move­ment will con­tinue on a fall and close be­low 37342. A fall and close be­low 37300 will in­di­cate con­tin­u­a­tion of cor­rec­tion to re­trace­ment lev­els of 36490, 35657 and 34937.

In the event of a break­out and close above 38990, ex­pect a rally to­wards 40000 and 41654. Sup­ply zone is at 38416-39000, which will at­tract re­sis­tance and profit book­ing pres­sure un­less an im­me­di­ate de­ci­sive break­out above 39000 is wit­nessed.

Monthly Chart

The cur­rent monthly bar chart for Septem­ber 2018 shows an In Bar, which sug­gests that the next ma­jor de­ci­sive break­out or break­down is out­side the range of 37128 and 39000.

Since the mar­ket is mov­ing into a higher top and higher bot­tom for­ma­tion, the bias may remain to move for a break­out above 39000 even­tu­ally.

BSE Mid-Cap In­dex Weekly chart:

Sup­port will be at 16077-15850. Re­sis­tance is at 16605 and 17017. Side­ways volatil­ity in the near-term can be seen be­tween 17017 and 15850 un­less an im­me­di­ate fall and close be­low 15850 is wit­nessed on clos­ing ba­sis.

BSE Small-Cap In­dex Weekly chart:

Ex­pect side­ways cor­rec­tion/volatil­ity above 16270 un­less it im­me­di­ately falls be­low 16270. The band of move­ment for near-term can be 16270-17335. A break­out and close above 17335 is es­sen­tial to con­firm broad mar­ket par­tic­i­pa­tion on the pos­i­tive side.

Strat­egy for the week

Last week yet again, the Sen­sex moved be­low 37559 but closed above 37774, which sug­gests sup­port. Traders and short-term in­vestors still long and hold­ing can main­tain the stop loss alert at 37342. The ob­jec­tive re­mains to book prof­its and exit long po­si­tions or re­duce the long po­si­tion ex­po­sure in the sup­ply zone of 38416-39000 as the op­por­tu­nity arises. Re­sis­tance is at higher range and a de­ci­sive break­out above 39000 is es­sen­tial to con­tinue the higher top and higher bot­tom for­ma­tion.

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