(My Original Blog Post: http://www.onlineequitycalls.com/2008/12/expect-sideways-movements-vasudeo/)
Technical Analyst, Hitendra Vasudeo: Last week, the Sensex opened at 9276.89, attained a low during the week at 9095.70 and moved up to form a weekly high at 9746.01 before it closed the week at 9690.07 and thereby showed a net rise of 724 points on a week-to-week basis. The candle movement was also positive.
Weekly support will be at 9510, 9275, 9095 and 8965 levels and weekly resistance will be at 9925, 10575 and 10945 level.
The weekly candlestick movement was positive, which could take the price up to test the resistance of 9925-10575.
Another round of strong weekly movement is desired and a further follow-up rise is required. One-off weekly positive movement does not help apart from generating intra-day moves.
Broadly, we could categorize the market as a sideways market with volatility in a wider band of 10945-8316.
One major corrective cycle leg gets completed of the fall from 21206 to 8316.
New up-move in the form of a pull-back rise from 21206 to 8316 will begin. If the Sensex rallies past to cross 10945, then the near term bottom is made and the rally will be of the fall from 21206 to 8316. The pullback levels are placed at 13238-14757-16276. We can expect at least 13238 if the above wave could get confirmed with a hurdle around 11000 mark. For this wave count to remain in existence, the Sensex must not violate 8316.
Weekly rise towards pull-back levels could be seen but sustainability is an issue.
Strategy for the week
Investors with stuck-up long positions can look for opportunities to exit wherever possible and try to generate cash at higher levels. Traders can get to trade stock wise movements on both sides as the market could develop one day up and down the next day pattern.
Source : MoneyControl