Sensex may consolidate
The unsuccessful attempt to move past 16,000 last week implies that the Sensex needs to do some more work before it can surpass this level.
The medium-term trend can now be revised to neutral and the index can be expected to consolidate in a range between 13,000 and 16,000 for a few more weeks.
Retracement of the move from March lows gives us the initial medium-term supports at 13,616 and then at 12,963.
In other words, the gap formed in the post-election push should be a strong medium-term support. Weekly close below 12,963 is needed to make the medium-term view overtly negative. The short-term trend has turned lower from the 16,002 peak. Sensex has immediate supports at 14,939 and 14,800.
Short-term investors should, however, exit long positions on a close below 14,800 since the next halt can be at 14,471 or 14,282. Resistances for the week would be 16,002 and 16,217.
Text & images: Business Line
Also see: Weekly review: Trading strategy - Sell all rallies