AH ! , here is one of the few sectors in this market, which we can term as 'bullish'. And I have been already suggesting the Satyams and Wipros of the world!!
The CNX IT index which was in a downward corrective move from 4775 to 3900 levels, seems to have completed the correction (up to 61.80% retracement level) and is already readying for the next upmove.
You will notice that the fall from the level of 4775 was due to the negative divergence on the RSI and the RSI going to the oversold level is suggestive of the completion of the divergence
I expect the move upwards will be slow (the participants of my workshop know why the move will be slow!!).
Consider crucial support at just below 3900. Today's closing is near to 4100 and hence the risk should be low. Moreover the 'results season' is already due and I will not be surprised if many software companies turn out good numbers and give out 'cautiously optimistic ' earnings guideline.
Check out your favorite techies .....
Happy stock picking !
CA Rajiv D Khatlawala
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