Sensex Technical View :
The volatility in the index has definitely left a lot of us confused and that would continue in weeks to come with lot many external triggers namely expiry this week followed by Budget in July 1st week.
Technically some things are more clear now.
- Index if stays above the momentum line which is roughly around 14k on closing basis there could be a bounce back in the short term which can also be termed a pre-budget rally.
- Index if stays below 14k on closing basis opens up to the gap area of 13500 -12900 which can also be a post-budget correction or global meltdown.
- So investors can accordingly position themselves and do keep a decent amount of cash in portfolio as suggested at 15.5k.
- Traders need to keep trading volumes low as there could be more stop hits with high volatility so good risk management may help.
Stocks to watchout for :
The stock has its 200 dema around 185 levels and the stock has heavily from 230 levels. Investors/traders can buy with a stop of 185 on closing basis and a target of 202/212.
The chart was earlier posted about how a move below 2145-2160 would turn the tide for the index. Reliance is now arnd 1950. The next important support is around 1850. The 38 % retracement of the entire upmove comes to 1900. So one can expect the stock to manage a pullback from the ones of 1850-1900. Any move below 1850 would take the stock to 1680-1750.
The stock has seen no meaning ful correction since October and the trend still remains strong. Currently in the range of 1500-1580. Move below 1490 or 1600 could give a quick 40-80 bucks move to traders on either side.
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