BSE-SENSEX--A TECHNICAL VIEW---FOR THE WEEK STARTING FROM---4-5-2015

BSE-SENSEX

CLOSED  AT 27011.31 ON 30-4-2015.

Range for the week ended on 30-4-2015 was:-27567.28-----26897.54.

Range for the month of April-15 ended on 30-4-2015 was:-29094.61---26897.54

SUPPORT: - 26897.54 / 26776.12 / 26726 / 26469.42 / 25910.77 / 25232.82.

RESISTANCE: - 27091.38 / 27203 / 27248 / 27355 / 27475.13 / 27485.77 / 27499.50 / 28044.49 / 28064.49 / 28087.78 / 28693.82 / 28822.37.

Sensex has closed the month of April-15 and the weekend around the lower range which exhibits gross weakness in it and suggest that a decent bottom is not in place now. Please note that it is running below all its short, medium and long term moving averages ,furthermore short term moving averages have started giving negative crossover which is a kind of confirmation of that the down  move to continue or may accelerate in coming days. Other technical parameters such as RSI & MACD are looking extremely bad on the daily, weekly and monthly chart and are showing huge negative divergence indicating that a good down move in coming weeks and months is expected if it does not improve, except for the RSI on daily chart which is showing some positive divergence but this may not come into play because moving averages are not supporting it. In totality it looks extremely week technically , however the next week starting from 4-5-2015 is the beginning of May-2015 series therefore it may behave in a steady manner and may give short up move also for few days  but It seems that the recent low of 26897.54 it made today will be broken effortlessly in coming days. Going down it will find good support in the range of 26950----26750 and if it violates this range then the next range is 26469---25910, and moving up it will find very tough resistance in the range of 27030----27500----28220.

In view of the above it looks highly bearish. Therefore, I am of the opinion that it has still not made a firm bottom but it may give a short up move from here. Since the trend is down, I would prefer not to initiate long trade personally but would look for opportunity to sell on the rise at appropriate levels, however aggressive trader can try long call above 27030 with a stop loss of below 26960. Avoid long call below 26897 for sure for the entire month of May-2015 but it can be tried near the strong support area in the rage of 26776—26469. Since short and medium term trend is down and long term up trend is in real danger, I would opt for sell call on the rise at proper levels and below 27000 & below 26897 for sure with a stop loss of above 27050 and 26965 respectively. Avoid fresh sell call if it closes above 27400.

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 still intact but severely threatened.  Since the bias is on the downside therefore I would not prefer to try long call till clarity on bottom formation emerges instead I would look for shorting opportunity.

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.