BSE-Sensex-Technical View For-7-1-2015

BSE-Sensex  closed at 26987.46on 6-1-2015

SUPPORT: - 26845 / 26469.42 / 26220 / 25910.77 / 25460 / 25232.

RESISTANCE: - 27092 / 27257 / 27355 / 27485 / 27500 / 27851.10 /28064.49.

 (Figures in bold are important)

Sensex opened with a gap down at 27694.23 and made a high of 27698.93 and thereafter it relentlessly went down and made a low of 26937.06 before closing the day near the low at 26987.46.It went down by a whopping more than 850 points on closing basis, the  fall was devastating and it has broken the on -going momentum for sure, it has also broken its all short term moving averages decisively which is a bad sign, furthermore some technical parameter suggest that it may be heading for much lower level in coming days and will break the recent bottom of 26469.42 for sure , therefore long call should be  completely avoided till it moves above 27500 and stays or give ample indication of correction completion .I would therefore suggest to try short call on the rise with a stop loss of above 27500,one can try short call below 26930 also with a stop loss of 27000 for a target of 26845 & 26469.42 on 7-1-2015 and below 27266.49 with a stop loss of above 27300 for the entire remaining week ending on 9-1-15.

It is important to mention here that it is pretty close to it long term moving averages and the range for it is between 26804—25476(it changes every day),if it breaks even the upper band of the range i.e 26804 that will be the first sign of threat to the long term up trend  and if it moves below 25476 mark and stays then the up- trend would be in real danger, So if the up- trend has to continue then it cannot remain even below 26804 mark for a longer period therefore one should start building long position in a staggered manner as soon as sensex falls within this range with a stop loss below 25100.

REMARK:-  :- Long term up trend is still intact. Today’s move has broken the on- going momentum therefore long trade is completely ruled out till bottom formation sign emerges, instead short call should be tried  on the rise  or below 26930 on 7-1-15 and below 27266.49 for the entire remaining week with a proper stop loss as mentioned above. 

Kindly note that make your cost your stop loss in favorable  trade and then trail it as the price move up/down to gain maximum profit and avoid losses. Use support and resistance levels as entry, exit, target and trailing stop loss points. DO NOT TRADE WITHOUT STOP LOSS.

Disclaimer:-The view expressed here are solely of the author and he is not at all responsible in any way for the outcome of the trade you enter based on the above view.

Note: Price stated here is of spot market.

Contact me for strategic guidance to enter and exit the trade.