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  • Raghvendra Narendra Dhoot
    Raghvendra Narendra Dhoot    Group moderator
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    Weekly Technical Outlook for the BSE Sensex and NSE Nifty – 19th August 2007 by Raghav's Picks
    BSE Sensex – Reuters – .BSESN
    NSE Nifty – Reuters Symbol – .NSEI

    Inspite of indications last week that the downside risk is limited, the Sensex and the Nifty fell over 726 and 225 points respectively, taking cues from the global market movements.

    My regular readers will remember that on 15th July 07, I had written that the markets are flooded with global liquidity flows and in such a scenario; the local technical studies mean little.

    It is ironical that the same logic is applicable today, but in the reverse direction i.e. the markets are spooked by global factors and in such a scenario, the local technical studies mean little.

    Add to it the ongoing political turmoil in New Delhi and you have the perfect recipe for stock market disaster.

    However before writing off the markets in the short term, there are a few bright spots to look up to:-

    • The Sensex bounced back from 13780 (the 200 DMA zone) on Friday to close above 14100, the strongest short term support zone for the markets.
    • There was a decent bounce back in the US markets on Friday.

    In light of the above and what the technical indicators seem to be telling me, I expect the Sensex to consolidate between 14000 and 14500.

    I have devised an indicator to gauge the volatility of the Sensex. The Raghav’s Picks Volatility Indicator for the Sensex comes into existence with a base value of 100 as on 11-July 2007.The value of the same on 17-August 2007 is 157, which as you have guessed correctly, indicates that we are in for yet more volatility.

    I can still see 16030 on the Sensex in the near term, subject to 14000 not being violated on a closing basis. If the Sensex closes below 14000, then we could see much more pain in the near term, much more than what we have already seen.The exact time period when the Sensex could touch 16030 is still hazy and will be clear only in the next few days to come.


    For detailed market analysis, investment, trading calls and, advisory services with respect to investing in Indian Markets, please mail me on raghav@raghavs-picks.com or use the personal message link: http://www.xing.com/go/privatemessage/RaghvendraNarendra_Dho...
    • 19 Aug 2007, 08:15 am