Date: 09/01/2012
Decisive move out of 16100-15100 required
By Hitendra Vasudeo
Last week, the Sensex opened at 15534.67 attained a low at 15358.02 and moved up to 16004.69 before it finally closed the week at 15867.73 and thereby showed a net rise of 412 points on a week-to-week basis.
Support will be at 15743-15482-15358-15135. Resistance will be at 16128-16775.
The low of 15135 registered 3 weeks back proved to be a recovery week. The subsequent week registered a fall but did not violate 15135. Last week was a rise but did not cross 16100. In the event of a rise and close above 16100, we may see a rise towards 16190-16519-16854. A rise and close above 16812 may extend the rise.
The second leg of the correction from the peak of 21108 is from 19131 or 18944. From these points, we may see a falling wedge or a terminal pattern developing. If that happens, then we may be in Wave d of the terminal impulse. The same gets confirmed on a rise and close above 16100. If that is so, then the rise may extend towards 16519-16854 before making it down as Wave e. In that case, we may find a higher bottom to come into existence against 15135. The internal of the fall from 17908 to 15135 also appears to have a terminal pattern. In that case, the move terminates at 15358 and not at 15135. If that is the case, then 16100 must be crossed with a strong close above it.
If the level of 15135 is violated, then obviously the stance will remain the same and the slide will continue with momentum on the downside. In that case, the slide will continue towards 13500 or below as we have been discussing in earlier issues.
Wave Tree:
Wave Tree
Month
Year
Sensex
Remark
Wave I
-
Dec
1979
113
Feb
1986
656
Wave II
March
1998
390
Wave III
Jan
2008
21206
Wave IV
December
2011
15135
In progress
Wave A
2009
8047
Wave B
11-Nov
2010
21108
Wave C
a
Nov
18954
b
20664
c
17295
x
August
19132
15764
October
17908
Conclusion
The range of movement continues between Sensex 16100-15100. Minor strength may be seen in a near term sustained rise above 16100.
Strategy for the week
Hold short positions with a stop loss of 16100 and look to cover them at 15743 or below as the opportunity arises. Buy above 16100 with the low of the day as stop loss or 15358 whichever is lower. Subsequently, exit at 16519-16854. Sell on fall below 15100 with the high of the week at the point of breakdown.