Sensex Technical View :
Sensex continues to trade in the range of 15300 and 16450 and the strategy to buy on dips for limited upside is going good for some time . Technically indices have tested the crucial support of 15300 arnd 3-4 times and bounced back but none of the bounces turned into a breakout. Such a move signifies lack of strength and traders should be extremely cautious and not take big commitments at higher levels range of 16000-16450 and wait for a clear trend.
Technically there are 2 possible scenarios in extreme short term :
1) Sensex tries to cross 16450 and tests 17000-17200 levels
This is one of the possibilities which can happen in next 4-10 sessions. Ideally better would be to wait for crossover above 16500 and play for a quick upside .
Things to watch on global cues which can favour -- Dow jones nearing resistance of 12800-12900 which is difficult to be broken but can breakout. Hang Seng 25000 -253000 resistance zone .
2) Sensex takes a shot arnd 16200-16400 and dips to 15300 or tests lows of 14700
This seems a good possibility as majority of the heavies are not in great shape to come out with a quick upmove. Risk players can get short arnd 16300-16450 with a stop of 16500 in stock specific counters. People who bought on dips should book profits around those levels or reduce positions with a view to re buy on crossover of 16500 + or buy in dips to supports.
Things which could favour this --- Dow Jones , Hang Seng and other indices very close to resistance zones and take a dip . Inflation numbers continue to soar next week and again the week after that effecting a sentiment change .
Strategy for now:
As being mentioned in last many posts that investors should continue to remain on cash and buy only on dips for limited upside and buy staggered for long term in dips. Traders as being advised put money in for a gain of 15-25% and pull the money back and roll it into other counters. Such a strategy has fetched good returns in last few weeks as many stocks discussed moved a good 15+ % quickly.
Also as has been mentioned that markets would see stability after April 1st and 2nd week would extend this view to end of April 3rd week as a bottom in this period ( 13 th week from Jan 21 ) would be crucial level to watch for in medium term.
Simplest strategy would be to reduce trading positions and get back on cash around 16200-16450 and wait for a break above 16500 or wait for a dip to lower levels .
Its not necessary for a trader to trade every uptick or a crack .... But wait for the trade which suits his lesser risk style ...
Review :
Paramount communications discussed few days back up at 29 from 25 can move to 32-35 ,Hind Oil exploration does 133 from 118 reco price look to book part ... Hul and ranbaxy moving too...
Message sent to clients in last 2 days :
04-Apr-2008 11:19:43
Buy Hindustan Unilever at 243-245 small qty add at 236 or above 248 . tgt 260 .
04-Apr-2008 12:15:05
Ranbaxy small qty buy at 460-462 for delivery add more at 450 stop of 440 tgt 490-530
07-Apr-2008 12:45:49
Hind oil exploration hold part qty and can add on sustaining above 125.5-126 for a tgt of 135-140.Hind lever hold for short term.
07-Apr-2008 13:29:38Hindustan Unilever book part at 255-256 next tgt 264 raise stop. Hind Oil , Skumars hold.
07-Apr-2008 14:11:12
Hind oil day traders can book part at 131-133 ..delivery tgt at 135-145 . Paramount communications initiated at 25 is freezed at 29 tgts at 30 and 35.
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Best Regards,
Nooresh
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