A technical view on Sensex
The BSE SENSEX on the long term charts still continues to look good. The SENSEX after making an all time high of 21206.77 on 31st Jan 2008 has still not been able to cross it’s that peak. The scenario which was present both technically and fundamentally in the year 2007-2008 has changed in the past two years. On the economy front we have become strong with good growth trajectory. The bubble which was seen in the year 2007-2008 with economic crises in the global countries has been well recouped with the help of financial aids from the Governments and inherent growth too. From the Technical perspective SENSEX was highly overbought on the monthly charts in the time frame of OCT-JAN 2008 with the RSI Peak at 85 levels in OCT 2007 and stochastic peak above 92 levels. In the current scenario the RSI is still trading in comfortable zone at 67 levels and the Stochastic near 72 levels. The above suggests that we are still not overbought on the long term charts and every decline can be used as a buying opportunity from long term perspective. For the coming month immediate Resistance for the SENSEX is seen at 21108-21500 band , a decisive crossover and sustenance above its this range can continue more up move in it. On the downside 18800 should continue to provide good supports. The Index is likely to consolidate in this range for some time and a decisive breakout on either side will only provide confirmation of market trend.
Stocks to watch out for:
1. PSL LTD.: PSL Ltd. has been on continuous decline. The stock now has taken supports around its 80 levels and is once again showing signs of strength. The stock if decisively sustains above the 97 mark may head towards 108/115 levels. Immediate Support for the stock is seen at 92.
2. MOIL LTD. (Manganese Ore (India) Limited): MOIL Ltd. in its charts is facing resistance at its 457 levels. The stock if decisively manages to sustain above its 457-461 levels is likely to head upwards towards its 480 levels. On the downside the stock has good supports at 445 levels. Thus, one can go long in the stock above the level of 461 with stop loss being placed below 445 for TGTS of 480-500.
3. COSMO Films: COSMO Films in its charts is showing strength. The stock has taken good supports in the zone of 125-117. The stock now looks good if sustains its current zone of 135. Stock has immediate resistance at 139 levels above which the stock may test 150/160 levels. Support for the stock is seen at 131-135 levels. Thus, one can go long in the stock above the level of 139 with stop loss of 135 for TGTS of 150/160.
4. Gitanjali Gems Ltd.: Gitanjali Gems in its Charts has resistance at 218 levels, if the stock crosses it’s this mark decisively is likely to head upwards towards its 232/239 levels. The stock has strong support at 205. Once can go long in the stock above the level of 218 with stop loss of 209 for TGTS of 239.
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