Sensex outlook weak for next week

The Sensex successfully broken the resistance at 14000 in the last week but could not hold above the next resistance at 15000. Sensex closed below 15000 in the last two sessions of the week and settled at 14274.94.

Reversal below 14000 would warn of another test of primary support at 12500, while recovery above 15000 would signal that the primary down-trend is weakening. Failure of support at 12500 would warn of another primary down-swing.

In these circumstances, the over bought formation on the simple daily stochastic assures another sharp fall during the next week to test the support at 12500. This validates our previous trend studies to hold good as the market movements are guided through the downward channel.