After eight months, on the very trading session of May,the Sensex inched past 12000, the level that was last seen in October 2008. The rally has stretched further, as the market gapped up considerably; the extension suggests that levels close to 12300-12400 could be tested in the coming days. Nifty on the other hand has completed equality targets at 3655 levels, but wave theory suggests a couple of legs pending, hinting the test of 3700 levels.The 12515 levels remain extremely important for bears, as any intra-day move beyond these levels will confirm the completion of a large corrective from 21200 to 7700 levels. The medium-term target levels around 12200 and 12400 have been met, and further bullishness will only be confirmed once the Sensex moves past 12515. The medium-term reversals are trailed further to 10961 levels,below which a sharp correction could take place. Shortterm trend has whipsawed the reversal levels, but the bias is now up till 12500 with reversal at 11585.

On the hourly charts, the momentum remains slightly overbought and a correction till 3500-3550 is probable.The hourly break-up as well as smaller candles near 3650 levels hint at minor correction in the coming trades.Moreover, caution is advised, as the market is near the key resistance levels corresponding with the head and shoulder’s pattern neckline near 12500 levels.

DLF has consolidated well within Rs220-240 levels and a decisive break on the either side will lead to a 10-15% move. Hindalco Industries has moved up smartly and the stock should target Rs65-66 levels in the coming trades.Infosys Technologies looks good till Rs1,700.

(Disclaimer: The above chart shown is for study purpose only and not for trading decision)

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