Market view for the week July 26 to 30, 2010

The Sensex recorded yet another 52-week high last week and the response from the market participants was just as indifferent the previous week. There is no doubt about the fact that the short and medium-term trends are still up. The laboured manner in which the index is edging higher suggests that the intermediate term range between 15,500 and 18,500 continues to shackle the index.

The fact that the medium term down-trends in global benchmarks has not reversed yet is another reason why it is best to say on guard. If we consider the movement of the Sensex from February lows, e-wave targets are 18,356 and 19,271. Minor wave count of the move from 15,960 lows gives us the targets at 18,382, 18,668 and 18998.

In other words, there is strong resistance between 18,300 and 18,500. If this zone is surmounted, 19000 would be on the cards. The medium term trend will reverse lower only on a close below 17,370.The Sensex is headed higher in the short-term but it can face hurdles at 18,325, 18,620 and 18,668 in the days ahead. Supports for this period would be available at 17,856 and 17,730.

Regards,
Free Indian Stock Tips Team