SENSEX Technical View : Technically a new high signifies a continuation of trend. On the upside 17200 and 17700 are resistances to watchout for.

Moves above 17k do seem a little stretched and speculative in nature although it can even go to 17.7k-18k in a very optimistic scenario for extreme near term. But at this point of time the upsides do seem to be capped and not a great place to go for longs as risk-reward is no more favorable.

Market Observations and Thoughts :

OPTIMISM , SPECULATION, QUICK MONEY , BUY long term , 6k on Nifty, NEW HIGHS nOW , INVEST soon etc etc and many such words to describe the current mood of investors/traders.

The market sentiment has not been so bullish since Jan 2008. At the same time in Feb/March 09 or even in May 09 the sentiment was still very cautious with people asking for Nifty puts/Shorts etc as hedge to portfolio or should i sell of everything !!!!

And now at 17k i get more requests for Long term investments!! Whereas at 9k people asked should I sell all and re-enter at 6k :P. Nothing wrong with it this is how the market is.

The simpler view now is remain hedged/increase cash if you are a medium term investor. Yes the index may go to 18k also in near term but discipline is what one should keep forever.

Had u been disciplined last year then u would have digested the pessimism in October-March 09 and if you are disciplined now you should not have problem seeing the excessive Optimism Now

By all means I do remain a very strong believer of the BIG BULL market in India but in short term I would like to just sit n watch more …. This is the best time to review personal portfolio/life and learn more !!

This article was written by Nooresh. He also writes on his own blog at Technical View by Nooresh

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