GalaTime

A look at the 1-year chart for the BSE Sensex-30 index shows all moving averages pointing firmly up and volatility (as measured by the Average True Range) relatively low, but a trend that seems to have weakened significantly of late, as measured by the ADX indicator:

Note the difference between Nov-Dec 2006 and recent price action. If we zoom in to this period and look at the 3-month chart, we see a similar divergence between the price and the RSI indicator. Unlike the 70+ “overbought” levels it hit in December, the RSI remains below 60 inspite of new highs in the Sensex.

Perhaps the indices are on the verge of renewing the strong uptrend seen in Q4 2006 - we’ll have to wait and see.

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This entry was posted on Thursday, February 1st, 2007 at 3:41 pm and is filed under sensex. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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