Expect higher range to be tested: Hitendra Vasudeo
The weekly resistance will be at 19918 and 20310. Weekly support will be at 19662, 19527 and 19100, says Technical Analyst, Hitendra Vasudeo.
By Hitendra Vasudeo
Welcome 2013! The market greeted the BSE Sensex warmly with a rise of 339 points. Last week, the Sensex opened at 19422.58, attained a low at 19406.17 and moved up to a high of 19797.44 before it finally closed the week at 19784.08 and thereby showed a net rise of 450 points on a week-to-week basis.
Last week was a breakout week as the Sensex moved up past the resistance range of 19600-19700.
The next lower top is at 19811. The 78.6% retracement and 88.6% retracement of the fall from 21108 to 15135 is placed at 19811 and 20444 respectively.
The weekly resistance will be at 19918 and 20310. Weekly support will be at 19662, 19527 and 19100.
RSI on the weekly chart is about to hit the overbought zone. The Stochastic is in the overbought zone. The MACD is above its average on the weekly chart. All this suggests that the rise may continue with volatility.
BSE Mid Cap Index
Expect the BSE Mid Cap near term rally to 7365-7491 at least which may run higher towards 7896.
BSE Small Cap Index
Expect the rally towards 8100 in near term to short term from the current level of 7615.
A breakout has been witnessed. Therefore, expect a near term rally with volatility. Expect 19811 and 20444 to be tested.
Strategy for the week
Hold long positions with a stop loss of 19100. Corrective dips to weekly support of 19662-19527 can be used for buying with a stop loss of 19100.