Stay above 8467

Having gone through my charts once again, i can say with reasonable assurance that the bottom of 7697 will not be violated again. We are not yet out of the woods as far as the bear market is concerned but we are sowing the seeds for the next bull market to emerge by next year. The next bottom that we are going to make has to be above 8467 for this theory to hold good that the bear market phase is indeed coming to a close.Im waiting to observe any market corrections that might happen from here on to see if this sacrosanct level gets violated or whether the sensex would be able to hold its chin above the water. We might even consolidate between 8500-10000 for many months in the wake of negative news that might continue to make its way into the markets but the sensex must display resilience to stay above 8467 for long term funds to start buying india again.

Targets reviewed for Sensex

As mentioned in my article in October, the sensex successfully and pretty swiftly breached the 8000 mark and reversed from 7697 to its present level of 10100. A near 30% rally has already come and gone within 2 months. So purely on technical basis where do we stand now?? The sensex has been struggling to close above 10123 for the last two trading sessions. A cursory glance of the futures and options market lends conviction to the thesis that this current bear market rally is not sustainable and its only a matter of time before profits get booked on this wonderful bout of short covering that we have witnessed this december. Throughout the last trading week we have witnessed short covering on rate sensitive stocks with lower volumes and decreasing open interest, which is a clear indicator of fresh long positions not being added at current levels. Investors would be well advised to stay away now if they have missed the 30% rally so far. The markets will give u some more opportunities during their next rendezvous with the bottom in place.