Recently I happened to bump into a friend who is senior Fund Manager and who also appears on the business channel saying that the DOW has bounced back and he wanted to know as to how I see the markets now. I told him that I had not seen the markets for over a week a I was unwell but I also told him that some times we see a technical bounce near the previous bottom, but how much we should value it depends upon the technical structure of the charts,

Technically the market has seen a good bounce after a prolonged down move and it is but natural that short traders tend to book profits near the previous bottom, and so a bounce should be taken with a pinch of salt. Market strength is determined not by short covering but by actual buying and I don’t see that as yet on the charts and so anything that goes up now is still a suspect to me.

Technically the market still seems to be in a reactive mode up and a sideways mode in a larger time frame.

The supports are at 8420 and resistance to the up move is at 9065-9213

The supports on the way down are at 2632 and resistances on the way up are at 2805

From a trading point of view I would be long but cautious.

source: Prakash Gaba

Tags: calls, daytrading, free calls, intraday, tips

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