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Saturday, January 16, 2010

BSE Sensex Index Chart Pattern - Jan 15, '10

The BSE Sensex index chart pattern went through some more sideways consolidation and ended practically flat for the week. An effort at a new high on Monday, Jan 11 '10 fell short, and the index again failed to muster up any volume support.

The FIIs were net sellers and the DIIs were net buyers during most of the week. The HDFC stock, which is an FII favourite has been drifting down of late. The impending PSU divestments could be a reason why the DIIs are propping up the index with buying support.

The 6 months bar chart pattern of the BSE Sensex index shows the listlessness of the bulls:-

Sensex_Jan1510

The three EMAs are continuing their upward journey with the Sensex above them. The bull rally remains intact.

The RSI has moved up to the overbought zone. The MFI made a similar attempt but failed. The slow stochastic is trying hard to remain in the overbought zone. The MACD has stopped moving up and is clinging on to the signal line. The technical indicators are looking a little less bullish than the previous week.

Action has shifted to the mid-cap and small-cap stocks as the large-cap stocks are looking fair-valued with little further upside left in them. This is a good opportunity to churn your portfolio. Get rid of some of the less than stellar performers.

Bottomline? The BSE Sensex index chart pattern wants to move higher but is unable to do so. A likely outcome could be a break down wards. Maintain tight stop-losses and try to subdue your buying impulse.

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