By Hitendra Vasudeo

Our expectation was of a further pull-back rise last week but the condition was that a breakout and close above Sensex 11000 must be witnessed to confirm the extended pull-back rise. But the Sensex did not exhibit a breakout and close above 11000. It opened the week at 10154.56, attained a high at 10570.58 and fell to a low of 9267.49 before it finally closed the week at 9385.42 and thereby showed a net fall of 578 points on a week-to-week basis.
A rise and close above Sensex 11000 was not seen and in fact we saw a retracement of the rise from 7697 to 10945. The retracement levels were placed at 9710-9327-8943. The low registered last week was 9267 and it closed at 9385. It has, therefore, tested the 50% retracement level of 9327 by attaining a low of 9267.
On a further fall below 9267, expect a fall towards the next retracement level of 8943.  When the Sensex made a low of 7697 on daily chart on 27/10/2008, it had formed a Hammer candlestick pattern. Further, it moved up with the gap and went on to attain 10945. The gap which is unfilled after the Hammer formation is in the range of 8894-8739. The lowest closing on the daily chart is placed at 8509. A cluster of support in the range of 8943-8509.
If we assume that the low of 7697 is unlikely to get violated, then the current fall from the trading lower top of 10945 will move towards the retracement level, which it has been doing to form a higher bottom and can move up to test back 10945. Ultimately, a breakout and close above 11000 is the key if the pull-back rise is to get extended in time to come.