The week past and expected
Technically speaking: In last week, the market remained in a consistent downtrend and has broken psychological
support 5000/17000 on Friday under the leadership of Reliance Industries. The market has even broken the strong rising
trend line at 16900/5030 on daily basis that may be the negative indication for the medium term trend of the market.
Now the next major support exists at 4930/16590 level, which is a 38.2% retracement level of the entire rally starting from
4540/15330. Since September, the level 4930/16590 has played excellent support for the market however, dismissal of the
same has also invited sharp sell off in the month of October and late November.
We feel that the current up-move may lose its momentum if it sustains below the level 4800/16200 for more than two
days. It does not mean that the level of 4930 is not important, it is also equally important and positional traders should be
cautious below the same on daily basis. If we go through the world markets, there also the trend is not strong and may
take time to reverse the current weakness.
On the higher side, the level 5030/16890 and 5090/17050 may act as a major hurdle for the market and to reverse the
current weakness the market has to chase these levels on daily closing basis.
In the last week, there was out performance in Pharmaceuticals, Technology, Auto and Steel stocks. There was substantial
under performance in Banks, Real Estate and Oil & Gas stocks. The trend was mixed in Infra, Cement and other
commodities (sugar, copper, aluminum and zinc).
In case the market survives at 4930 for the short pull back then we may expect first pull back in Bank stocks due to its
oversold activity on daily as well as on weekly charts. The cement and Auto may be the next best sector to improve the
sentiment. For the technology sector we can say that we have seen consistent out performance in last several months.
One should be cautious at least in frontline stocks while trading. Other than steel stocks the metal pack is looking weak
and may offer shorting opportunity at each resistance levels
