16167-15711 range to be tested: Hitendra Vasudeo

By Hitendra Vasudeo

Last week, the Sensex at 16620.44 attained a high at 16944.13 and fell to a low of 16233.75 and closed the week at 16292.98. The Sensex thereby showed a net fall of 538 points.
The 50% and 61.8% retracement levels are placed at 16828 and 16257 respectively. The low registered last week was at 16233. The 61.8% retracement was violated and closed below it. Our expectation last week was that retracement levels will be tested, which were placed at lower levels and the same has come true.
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.
Expect these levels of 16167 and 15711 to be tested.
Weekly resistance will be at 16490-16747-17000. Weekly support will be at 16036-15326. Conclusion
Lower projection level may be tested as indicators now start getting into the oversold zone. We may see the lower level of 16167-15711 range being tested before making an attempt to move higher. But a rise and weekly close above 17000 may mark a reversal. But till then broadly, a rise can be used to exit long. Strategy for the week
Hold short position with a stop loss of 17000. Exit long and sell on rise to 16490-16747 with a stop loss of 17000. Cover short positions at 16036-15326 range.