The SENSEX opened the week on a bearish note and the index plunged to an intraweek low of 18326.42.Thereafter, the SENSEX spent the entire week trading in a narrow range of 18400— 18800 levels.The SENSEX finally closed the week at the 18561.92 levels with a cut of 296 points.
Clearly the immediate level to watch on the SENSEX is that of 18306 (marked in the chart above).It should be noted that 18306 is also the 50% retracement level of the rise from 17482 to 19131; hence we believe that the chances of SENSEX holding out here are by far the best.As of now there is not much evidence to suggest that the SENSEX has the weakness to break below this level, though in case of such an event, look for the downside movement to gain momentum to the levels of 18130-18030.
On the upside the SENSEX needs to sustain above 18680, which would give some strength and a possible test of levels of 18990 – 19130. A close above the 19130 levels could give a good upside spurt with likely targets of 19400 /19650 levels in the short term.
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