Sensex 18200/18500 support … Conserve Cash and be Patient.


Sensex Technical View:

The view remains the same as before till the market doesnot see a close above 19200/19600 levels we cannot confirm any upside momentum.

On the downside the supports are as follows.

- > Previous breakout took placed at 18500 and 5550.

- > Long Term Parallel channel is closer to 18000-18250 levels

- >Previous Major Bottom at 17800

For the medium to long term trend it will get negated on weekly closing below 18500/17800 levels.

In the short term we have two parallel channels pointing to support closer to 18500 ( + - 150 points). Even if markets were to break 17800-18200 band I doubt it can do so without an intermediate bounce.

Ideally even in a bearish medium term case there is a good possibility of bounce from 18500 odd zones. Traders may watch for some support being seen over the next few sessions to take a buy position with a pure view to exit on any bounces.

Last week we mentioned about a positive RSI divergence in Bank Nifty which gave us quick trading opportunities in Banks. Currently there is a good possibility that Sensex can form a similar positive divergence provided it doesn’t fall below 18500 in next 2 sessions.

Strategy Thoughts:
As we are seeing that the market has been indecisive and possibilities of a consolidation look very high in the range of 18500-19500 or in a broader range of 18000-20000.

In such a period one needs to be patient and wait for precise good risk-reward trades and keep the volumes low till a good trend is not established.

Cash is also an investment/trading position.

Sometimes doing nothing can be Good 🙂

Stocks to Watchout for :


DLF HDIL and other real estate stocks could not hold on to the lows of last week implies the possibility of bounce getting ruled out. So for now we may avoid the sector.


Banks did see a sharp bounce from expected oversold levels. It needs to be seen whether it can hold on to their previous lows. SBI 2450-2500 and ICICI 960-980 are trend deciders for the Bank Index. We may continue to see support around those levels.


AGRE Developers suggested last week has caught attention of market-men hold for higher targets and reduce above 55/65 levels.



February  5th – 6th 2011 MUMBAI ( Limited Seats)

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