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Sensex The Big Traps
1.
2. 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?
3. 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)
4.
5.
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.
6.
7. 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 !
8.
9. 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+.
10.
11.
12. 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.
