Sunday, February 14, 2016

BSE India Bombay Sensex Weekly Chart

India has been slapped lower over the last year peaking at 30K now at 23K, a -23% collapse, clearly in a bear market. Price is sliding down the brown channel with lower lows and lower highs. Price collapsed -6.6% last week violating the lower standard deviation band and testing the strong 200-week MA at 22820. The 23K level is also strong price support. Those three items, along with the green lines that show positive divergence, should create a bounce. The red lines, however, for the RSI and MACD line, remain weak and bleak wanting another lower low in price after any bounce occurs.

So it is likely price will bounce, if so two paths are possible. A sharp and strong recovery rally a la the September-October rally (purple path) after which price will come back down say in the March-May area for new lows, or, price bounces in the week ahead and then immediately retraces down for the lower low (blue path), creating further positive divergence and more upside juice, then the recovery to the top channel line occurs. Over the next couple weeks the path ahead should verify itself. The 24.0K to 25.5K range is likely in play for the month or two ahead. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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