Sunday, September 4, 2011

Technicals for the Week

The markets closed up 6.2 pc for the week to end at 5040. Let us look at what is in store for the coming week.

1. We have a short term low in place as the market cleared the previous high of 4965 quite comfortably and closed above it for the past 2 days.

2. This means the down move from 5944 is in its 4th wave up. Retracement targets could be 5110 (already done), 5230 and 5350.

3. 4th Wave is in three legs A-B-C. A may be done at 5114. B could end at 4964, 4917 or 4870. Only a close below 4870 indicates weakness.

4. Gold continues to rise and we should see a rise till about 2200-2400 USD. Gold is buy on dips till it hits the targets

5. The Gilt funds have started giving a monthly return of about 1 pc for the past 2 months. Time to add more funds in the Gilt funds after the RBI Meet on September 16th. Hike of 25 basis points is factored in, but I would ot be surprised to see a 50 basis points hike looking at inflation and the GDP numbers.

6. Trend line support comes at 4955-4965 again underlining the significance of this level.

7. On the upside we run into resistances in 5180 - 5200 band. Immediate resistances come in at 5100-5120.

8. The Bollinger Bands give resistances at 5195 and 5350.

To sum it up, watch out for supports at 4965, 4920 and 4870 and resistances above 5100.

I am enclosing the link of Lakshmi for those who are interested in bottom fishing of stocks.


  1. Hi,

    Do you recommend any gilt funds?
    Any views on Birla Sunlife Fund - Long Term Growth and
    ICICI Pru Gilt Inv-G?


  2. I would reccomend Birla Sunlife Government Security Fund - Long Term Growth Fund