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Sensex The Big Traps


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Sensex The Big Traps

  1. 1.  Markets are supreme but also deceiving at times. Very often the intent of the market is to deceive the market consensus be it fund managers, analysts and participants in any manner.  Below is a technical report on how Shorters got trapped in market dips and Weak bulls got a scare?
  2. 2. ED LINE -- Denotes Momentum Trendline (This is what is broken and traps quick chart lookers ) LUE LINE - Denotes Support Line (This is where SHORTS are TRAPPED , WEAK Bulls get scared ) REEN LINE: Denotes Bullish Flag breakout line (This is where smart money leaves Bears scampering to cover)
  3. 3.    The trendline is broken by a little margin but the sloping support line holds up ( The string cannot be stretched beyond this )    Effects : Created Doubts about election results but market knows everything and is SUPREME is the basic assumption of all Analysis   After-Effects -- Bang on a big big Gap Up move of 20% +  Practical Observations : Many stocks all around were waiting to explode about resistance levels with nice volume accumulation. 
  4. 4.  The trendline is broken but the deep sloping line holds up ( Market reverses from 13200 ). I had discussed about the Head and Shoulders pattern in my post Head and Shoulders unrevealed --------Saying Head and Shoulders waala aadmi mar gaya :) ... Bullish flag /Inverted HnS is what people will talk about.   Effects : Made people go short for Big targets of 11k Sensex.Shorters got trapped badly. HnS sees a test of neckline even if it has to go down.  Practical Observations : Many large caps did not break support levels ( Reliance lead the correction. It retraced 38% after such a big move and was needed to cool the super upmove from 900 to 2500)   After -Effects : A good move of 15% from lows and 1000-1200 points from breakout which was the size of Bullish Flag ! 
  5. 5.  The trendline was broken by a very slight margin but recent lows of 14700 not broken. TRIPLE support --- 50 dema , 50% retracement and sloping support trendline pointed to strength.   Effects : Gap down and Sensex loses 600 + points. The media talk scared lot many investors.   Practical Observations  : The broader market was going up with Midcaps roaring and Advance to Declines was positive instead of showing a major drop.   After-Effects  : Sensex recovers 1000-1200 points with Nifty making new high for the year. Might be headed to 16500+. 
  6. 6.  Index goes to 16200-16800 and creates a diverging move with a good possibility of a big correction coming in.This can be confirmed when we reach there.   Volumes and strong move seen above 16200 and sustains for a good amount of time then the index can get stretched to 17700 zone which is the top of recovery in May 09.     So time to watch closely for practical insights and also how moves shape up. Time to review: When we reach 16200-16800. 
  7. 7.  Website:  Daily Blog:  E-mail :  Phone No : Nooresh 09819225396