Positive short-term trend
Indian stocks continued their audacious climb last week and the Sensex closed with yet another hefty weekly gain. The strength in this rally will, however, be severely tested next week as the earnings announcements gather pace.
The short-term trend is positive but since the Sensex is approaching key medium-term resistance levels and momentum is beginning to slacken, investors should take some money off the table. Immediate targets for the current up-move are 10805 and 11600.
Since the first target has already been achieved, Sensex can have a shy at the second target. The 200-day simple moving average present at 11340 is also a formidable resistance in the near-term.
Supports for the week would be 10393 and 10060. Short-term investors should avoid fresh purchases on a decline below the first support. Medium-term view will turn negative only on a close below 9500.
Text & Images: Business Line