Last week, the Sensex gave a follow-up to the breakout that was witnessed for the week ended on 06/07/07. The Sensex opened at 15018.71, dipped to a low of 14829.55 and zoomed to 15330.73 before it finally closed the week at 15272.72 and thereby showed a net rise of 321 points on a week-to-week basis.

In the strategy for the week, as indicated last week, corrective dips to support levels of 14870-14732-14638 can be used for buying. The low of last week was 14829 and it touched the buy price of 14870 to close the week at 15272. Traders who have been able to implement the strategy had the opportunity to benefit. If Nifty traders had bought when the Sensex attained the buy price of 14870 and held on to long positions as the weekly trend is up, they must have benefited substantially.

The weekly trend has turned up after the weekly closing on 22/06/07 at 14467 and can turn down on fall below 14638 during the week or if the Friday weekly closing is below 14838. The Sensex has crossed the resistance of 14996-15138 and has closed the week above it. Therefore, expect the Sensex to move higher towards 15459 at least and to an outer extent to 15960.

The overall first important target will be at 16200 and ultimate target would be at 18588. Weekly resistance or weekly upper expected levels are 15459 and 15960. Weekly support will be at 15144-14957-14829. As per the yearly levels, which are derived after closing on 31st Dec.’06, the first upper level indicated was 15615 and the second level is at 20851.

The yearly centre point was at 12200 and the Sensex made a low of 12316 and recovered to make new high. Now, we are into a striking distance of the first expected upper level for 2007, which is 15615. We have been highlighting the level of 15500-1600 at least for year 2007. At one point, when the market fell to a low of 12316, it looked that 15500 will be attained in the latter part of the year and could consumer time to reach 15000+ mark, as the momentum broke due to customary yearly fall during the period March-June 2007.

Review of the Elliot Wave Count to get the broad market picture: First Count: Wave 1- 2594 to 3758; Wave 2- 3758 to 2828; Wave 3-2828 to 12671; Internals of Wave 3 Wave i- 2904 to 3416 Wave ii- 3416 to 2904 Wave iii- 2904 to 6249 Wave iv- 6249 to 4227 Wave v- 4227 to 12671 Wave 4 Wave a -12671 to 8799 Wave b-8799 to 14723 Wave c-14723 to 12316 Wave 5- 12316 to 15330 (Current upmove in progress) Internals of Wave 5 Wave 1- 12316 to 13386 Wave 2- 13386 to 12425 Wave 3- 12425 to 14384 Wave 4- Wav a- 14384 to 13554 Wave b- 13554 to 14683 Wave c- 14683 to 13946 Wave 5- 13946 to 15330 (Current up move- Wave still in progress)

Strategy for the week

Corrective dips to support levels of 15144-14957-14829 can be used for buying. Expect 15459-15615 range to be attained. Traders can think of booking profit or ride the trend till the trend is up. A weekly close below 14838 can turn the weekly trend down.