Sensex Technical View :Couple of days back had put this chart of comparison to earlier pattern compare flags Again we will list down a few technical points.1) GAPS FilledSensex has filled all the 3 gaps which we had been discussing since markets were nearing 10700 zones. The last gap at 8740-8900 is finally filled. Its a preferred thing that gaps dont remain unfilled. Also the 3 gap ups gave the ideal opportunity to book and generate cash in exhaustion.2) Flag PatternYet again we are seeing a flag formation similar to what was seen after March lows as shown in another chart. The characteristic of such a pattern is declining volumes in this period which we are seeing now. Followed by that we need to see a breakout with larger volumes to confirm. The levels on higher side for break out are roughly 9400-9700. So continue to wait for a breakout on upside to decide next move till then wait .3) Retracements.The 61 % fibo level is done at 8900 and markets are trading below it. The fibonacci levels are not strict technical support zones. Although in such corrections markets can correct to 75-85 % also in some cases. Generally markets are found to retrace uptill 61 % but that is not the only consideration for trading decisions.In simple words the strategy remains the same to wait and watch , look for stock specific trades. Since the decision to book out/generate cash at 10500-10700 the view has been to look for selective trades on either short or long side. Continue to keep the above chart as a reference to catch the next direction.
