A very healthy bounceback

We had repeatedly been advocating that the nature of the bounceback will be crucial in determining if the top has been hit and Wave C has started, or, that we will go onto make higher highs. Let's take a look at the charts and see where we stand now.

US:
We had indicated 13200 to be a crucial support. As can be seen from the chart, we hit 13250 but recovered very strongly from there to close at 13640, almost 400 points up. The indices reacted from 2 key areas - crucial support 13200 and also from the 50EMA . The next resistance is obviously the previous high which stands at 13757. We still maintain a view of either closing out all long positions and having short term shorts.



India:
We had indicated 13800 to be the crucial support. The sensex meanwhile came down to 13950 and since reacted from there to abt 14335 before finally closing at 14163. As can be seen from the chart, the support came from the 50EMA. Another interesting support has been 14000. This figure has acted as a support sometimes and a resistance sometimes. The next resistance is at 14500 and then 14700. However we will take this as it comes and not worry too much about it right now. This is line with our previous view of looking at the market behaviour itself instead of worrying abt what it might and could do. The earlier view of short term buy still holds, unless otherwise indicated by the market action.