Just when it appeared as if the Sensex would slip past the 10,500 mark, it was yanked back by the misdoings of Ramalinga Raju.
The bulls however need not throw in the towel as long as the Sensex holds above 9,000. An upward reversal from here will result in the index moving higher towards 10,500 or 11,000 again. The near term view will turn murky only on a definitive close below 9,000.
Medium-term trend in the index continues to be sideways in the band between 8,000 and 11,000. Sensex is declining from the upper boundary of this range. As per E-wave counts, a five-wave move has been completed between November 20, 2008 and January 7, 2009. This is the third part of a 3-3-5 flat formation.
For the week ahead, an upward reversal from current levels can take the index higher to 9,700 or 10,000. Failure to surpass the first resistance would imply that the down trend would resume to pull the index lower to 9,120 or 8,467. Key near-term support for the index is at 9,120. Short-term investors can continue to buy in declines as long as this level holds.
Text & Images: Business Line