Market Outlook - 1st Septemer 2008

Wider rangebound market
By Hitendra Vasudeo
Following was the view expressed last week: "The support range of 14153-13727 holds the key to the overall market." Last week, the Sensex opened at 14643.37 attained a high at 14672.69 and crashed down to a low of 14002.43 before closing the week at 14564.53 and thereby showed a net rise of 163 points on week-to-week basis. The Sensex took support from the important range of 14153-13727 by making a low at 14002 and recovered to close at 14564 to record weekly gains.
Earlier, the Sensex had shown 5 weeks of weekly gains from 12822.75. And although the Sensex made an intra-week low of 12514 but closed positive on a week-to-week basis. In the last 3 weeks, we had 2 weeks of negative weekly closing but last week we had a week-to-week positive gain in the important support range. As a result of the last week's price movement, the Sensex has formed a Hammer. The Hammer suggests an attempt to move higher could be attempted with intra-week corrections.
Resistance will be witnessed first at 2 weeks high of 14824. Initial resistance range will be at 14672-14824. In case of further breakout and close above 14824, expect a rise towards the next resistance range of 15130-15167 first and then towards 15422-15579-15789.
Support will continue to be in the lower range of 14136-14066-13727.

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