Retracement levels being tested: Hitendra Vasudeo
Retracement levels are being tested and if a recovery comes from the current level or from 16257 or from projection levels of 16167 or 15711 may show reversal to move higher near 18523.
Technical Analyst, Hitendra Vasudeo:
Last week, the Sensex opened at 17195.51, attained a high at 17432.33 and fell to a low of 16776.72 before it finally closed the week at 16831.08 thereby showing a net fall of 356 point on a week-to-week basis.
In the strategy for the week mentioned last week, we had indicated that the objective remains to exit long and sell on rise to 17199-17379 with a stop loss of 17530. The high registered last week was 17432 against the sell range of 17199-17379. The closed was lower at 16831. Traders who managed to sell as indicated had the opportunity to benefit. Follow these levels and simultaneously execute to trade in Sensex Futures or Nifty Futures to trade.
The 50% and 61.8% retracement levels are placed at 16828 and 16257 respectively. The low registered last week was at 16776.72 and closed at 16831. The 50% retracement level was tested. A further sustained fall below 16700 may extend the slide towards the 61.8% retracement level, which is at 16257.
The 61.8% projection of the fall from 21108 to 17295 projected down from 18523 is placed at 16167. The 61.8% projection of the fall from 19697 to 15135 is projected from 18523 is placed at 15711.
Weekly resistance will be at 17013, 17250 and 17532. Weekly support will be at 16594 and 15938
Retracement levels are being tested and if a recovery comes from the current level or from 16257 or from projection levels of 16167 or 15711 may show reversal to move higher near 18523. Expectation can be kept that retracement and projection levels mentioned will be tested before making an attempt to move higher.
Strategy for the week
Hold short position with a stop loss of 17530. Cover short position at 16594-15938. Exit long and sell on rise to 17013-17250 with a stop loss of 17532. If lower range of 16594 or below is attained first and then 17013, in that case you can avoid selling.