WELCOME 2009!

There could be a good start on Monday on the back of the stimulus package announced last Friday, besides strong cues from the world markets. But we are faced with strong resistance band between 10700 and 11000 on the SENSEX and between 3150 and 3250 on NIFTY.

Low volumes and declining Open Interest in derivatives segment point towards a lesser hope of a sustainable rally in the near future. Investors are sitting fingers crossed over the impending quarterly results and short term traders are booking profits in longs at current levels. In such a scenario it is a mood of lesser enthusiasm though, the element of surprise is a peculiar characteristic of stock markets. So, it would be a surprise if move above 11000 on Sensex in the near term. Currently the BSE SENSEX is at about 10000 levels and it is only 1000 points away from that crucial medium term trend deciding level of 11000(NIFTY 3250).

TECHNICAL LEVELS:
Resistance band for this uptrend is 10700-11000 for Sensex and 3150-3250 for Nifty.
Uptrend continues until the SENSEX holds above 9150(medium term stop loss).
Stop loss for long holdings would be 9500(Short term stop loss).
Fresh longs above 10320 only. Upper Target 10950.
Inability to move past 10200-10300 band would be a cue to go short for lower tartget 9500.

Please remember that if there is going to be a rally above the given resistances, it would be a bear market rally that could fizzle out any time. Maiximum target for such a rally would be 12000 on Sensex and 3500 on NIFTY.

Please also keep a watch on updates from time to time.