It was a week of losses at Dalal Street but are things as bad they seem to be? Let us try and explore.
1. The markets lost about 3 pc to close at 5888.DIIs bought worth 865 crores and the FIIs bought worth 32 crores. Now, this can be interpreted in 2 ways. Markets fell in spite of 2 pillars not selling indicating shallow market. Else, it was operator driven selling.
2. We have trend line supports at 5803, 5830. These are very important supports as breaking this we enter the previous channel and 1 trend line is line joining lows from March 2009.
3. 5960 becomes a very key level as 5 week low ema and 5 day low ema is around this point.
4. The Bollinger band has touched the lower line after touching the upper band implying a bounce is possible anytime soon.
5. Ireland crisis seems to be over, 2G is settling down. Even if we have hit the top, expect a corrective upmove to 6045, 6101, 6156.
Corrections are part and parcel of trading. One should follow the trend for trading. We are near key supports and expect at least corrective bounces any time. We have now fallen for about 9 sessions and usually all falls are for 8-11 sessions.