Sensex Outlook Sept 23-27, 2013

Sensex closed at 20263.71, a rise of 531 points as compared to a rise of 463 points in the previous week. In the weekly chart below, we see that the market has undergone a severe trading range environment between the lines L1 & L2. At 1, it had formed a double spring which achieved its objective at 2 on L2. Now at 2, it is forming a reverse spring called an upthrust. Its target is the bottom of the trading range i.e. L1. However, looking at the fact that the previous move has been very strong with two hammers, a weekly unfilled gap, reds turning upwards and an internal upsloping trendline L3, we expect the target bearishness to be reduced.