BSE-Sensex-Technical View For-8-1-2015

BSE- Sensex  closed at 26908.82 on 7-1-2015

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 on a flat to negative note at 26983.43 and made a high of 27051.60 for the day and then made a low of 26776.12 before closing the day at 26908.82.After a huge fall of yesterday ,It showed no sign of recovery today and closed 78.64 points lower this indicates gross weakness in it and points towards deep correction in the offing in coming days ,however in between short up rally cannot be ruled out but the bias is down as of now. Please note that if it breaks again the 26845 mark and stays then it can break the recent bottom of 26469 it made on 17-12-15, furthermore some other technical parameter pointing towards breaking of 26108 level too if weakness persist, chances of breaking the aforesaid level is looking distinctly possible. I would therefore advice to avoid long call completely till it moves above 27500 and stays or give visible indication of correction completion. As of now it sell on the rise market, so try short call on the rise with a proper stop loss or below 26845 with a stop loss of above 26920 on 8-1-2015 and below 27266.49 with a stop loss of above 27300 for the entire remaining week. Going up it will face resistance at 27270 & 27500  and  moving down it will have support at 26845 & 26469.

It is important to mention here that it is pretty close to it long term moving averages and the range for it is between 26817—25501(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. It did break the upper band today but bounced back and closed above it. So if the up- trend has to continue then it cannot remain even below the upper band of the averages 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 of below 25200.

Kindly note that profit should also be booked in trade from time to time at the appropriate points so that you can take advantage of the market swings.

REMARK:-  :- Long term up trend is still intact. But it is in correction mode now, therefore long call is completely ruled out till it gives visible sign of correction completion. As of now it sell on the rise market, so try short call on the rise and below 27266.40 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.