I am watching yesterday action it now appears atleast technically that a bounce of 200 MA on composite is sixth time in last five years, we have seen this bounce associated with a with a 12% move, now I also see that the capping thing on short term configuration has always been the 50 days MA, there was one accasion when the market turned back from 50 days MA Dec 97 after bouncing off 200 very nicely it retested the 200 MA and once crossed passed 50 days the second time never looked back until 1931 was the final resistance. I would like this 1823 level to be maintaned now for foreseeable future if this is the begining of summer rally. Now I would think that if this composite reverses from here I will term yesterday move as a false break above the 1823 level. Composite will also depend on what hapens with PSE at around 340 a formidable resistance,thie technology index is more in line with composite than SOX.
If you look at it closely it is bouncing off 200days MA although it did take out this 332 but 340 is a main resistance if this is out I think we will see SOX bearish formation to attack the overhead resistance of 268 area which is also the 200 MA, the 50 days is around 301 area, SOX has so far been unable to tear off these two resistances since Oct but if you look at the chart it does reminds me of a situation that whichever side it will break it will be a big move, I think the next target of SOX is take out 260.
Consideing composite action yesterday and if it stays above this 1823 level during this whole week I think we are heading higher, I wrote on SPU the resistance at 1127 I would like this resistance to be moved higher at 1130, the support being 1107 area. I see the potential move above 1130 to be a 53 point move, a double close above this level, I will like to take cue from composite action as it has more of history behind it. I will trade on long side if composite and PSE shows me the direction above 342 on PSE after two days and above 1823 on composite from tomorrow we will see some short covering rally. But my levels need to be cross checked during the market proceedings. |
