Sensex outlook bearish for short term

Sensex losing nearly 1000 points in the last two trading sessions on 27th and 30th June 2008 has confirmed a bearish market outlook in the short term. Market closed below 15000 at 14889.25 for the first time since March 2008 on 10 June 2008. This is a triangle break out at the bottom side witnessing strong bearish trend thereafter.

The triangle formed on the daily chart has the top declining line touching at 18683.16 (04 Feb 08), 17600.12 (02 May 08) and 17434.94 (16 May 08). The rising bottom of the triangle touched at 14809.49 (17 Mar 08) and 15514.79 (04 Jun 08). The triangle break out occoured on 09 Jun 2008 when the market opened on the lower side with a gap of 450 points from the previous day's close of 15572.18. The break out point of the triangle is at 15560, while the market opened on 09 Jun 2008 at 15115.97 and closed at 15066.10. This break out is again confirmed to be strong when the market tried to push above the bottom line of the triangle at 15696.90 and failed on 17 Jun 2008. The bottom line of the triangle as shown in the image here would serve as a strong resistance before the market turns bullish as the sensex value is well below this line now.

Sensex forecast for July 2008 revolves around the above formation on the daily chart. If you go by the techical analysis rule, the triangle break out has the potential of moving the market along the direction of break out to the extent of tallest portion of the triangle, from the point of break out. In this case the tallest portion of the triangle is between 18124 (top) and 14809 (bottom) having a difference of 3315 points. Therefore the market is expected to move 3315 points downwards from the point of break out of 15560, setting a target of 12245 at the bottom side for the short term range during July 2008.

First forecast on Trendcues.com turns success

In our first forecast posted on 4th June, the fall of market was clearly indicated to test support at 14750, when the market was at 15,962.56 as of close of Friday 2nd June 2008. Sensex duly touched the lowest level of 14645.31 on 10th June 2008, before retracing to slightly higher levels later.

This first forecast posted on Trendcues.com itself has striked success. The blog writer at Trendcues.com has a strong market tracking background ever since 1991. The writer has a very high success rate to his credit in forecasting stocks, commodities and forex market trends. However his forecasts are being published through this blog for the first time now. Trendcues.com takes pleasure in sharing this success with all its visitors.

The earlier chart studies and forecasts made by the writer would be soon made available to the readers of this blog for reference and study purposes.

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Sensex breaches support at 16000

As indicated in our previous post, the market has given way to the bears and breached the psychological support at 16000 on tuesday 2nd June 2008 and closed at 15,962.56. Catching the bear trend, sensex futher lost around 500 points and closed at 15,514.79 as a result of petrol price hike announced by the Govt. today. The breach of support at 16,000 would see the next stop only at 14,750.00 according to the support levels available on the daily price chart of Sensex. Hence it is advisable to wait and watch till sensex settles at around 14,750 to make further purchases.

As indicated earlier there are strong signals of bear trend to continue as the support at 16000 has broken. Unless the market bounces rapidly to break the resistances at 16,000, 17,000 and 19,000, there are no clues for the bullish run in the near term.