Weekly Market Outlook – 25th March-2013 to 29th March 2013

Previous week, The Bombay Stock Exchange {Sensex} opened at 19283 attained a high at 19379, knock down to a low of 18669 before it finally closed the week at 18736 and thereby showed a net fall of 691 points on a week-to-week basis. Lower Levels tested with volatility.

The revival that was seen from the low of 18760-19754 fizzled out and lost all the gains to close below 18760 previous weeks. The terror of a false spike was in mind and wondering if this had any meaning from the chart perspective. It proved to be a spike in a lower top and lower bottom formation from the high of 20203 that was formed in 29 Jan’2013.

A trend line breakdown has been witnessed. First of the rising trend line was from 15748 and 18255 and the second was from the higher bottoms of 18250 and 18760.

The trend-line breakdown warns that lower levels are likely to be tested in due course of time with volatility.

The fall from 21108 @ Nov’2010-15135 @ Dec’2011 moved in the retracement range of 78.6% and 88.6%. The retracement levels were placed at 19855 and 20450. The high registered of the rally from 15135 was 20200.

The downside projection level of the two points 20203 & 18760 from 19754 are located at 18323, 17425-15985 respectively.

Support may emerge at 18255 or around it. A bounce may be witnessed in the 18323-18255 range to respect the support. In the event of a further fall and close below 18200 the slide will continue towards 17426 and 15984 in due course of time with volatility.

Weekly Resistance will be at 18927-19186-19427. Weekly Support will be at 18476-17767.

A pull back from the lower range cannot be lined out but it must materialize effectively and not just display intra-day spikes.

BSE Mid Cap Index:

Down trend is likely to continue. The lower range of 6140-5735 will be tested with volatility. Till 6525 is not crossed, the objective remains to exit long and sell stocks from BSE Mid Cap Index.

BSE Small Cap Index:

BSE Small Cap index is likely to move down to 5690-5460 from the current level of 5775. The objective remains to exit long and sell on a rise till 6400 is not crossed.

Termination:

The trend remains down and market may see a bounce from the lower range. Taken as a whole lower top and lower bottom formation is likely to be seen in time to come. Rise, if any, in days to come is likely to a generate lower top against 19755 and may test it.

Strategy for the week:

Sell on rise to 18928-19186 with a stop loss of 20210. It can slides upto 18325-18260-17425 and 15985 to be tested in time to come. For near to short-term, expect a bounce as short covering can happen in the range of 18325-18260. Further weakness will be seen below 18200.