GENERAL TECHNICAL VIEW
In our last Weeks technical view and in our Technical view on 26th November we did mentioned about multiple Support zones for SENSEX and NIFTY which were around 19000 and 5700 respectively talking about precise levels we mentioned about panic lows to be made in SENSEX at 18946 and in nifty at 5687 and their respective lows were 18954 and 5690 the bounce back during the last week looked to corrective only for first two days although using Intraday charts we did generated some good buying calls during first two days too but the correction converted in to a meaningful rally on Wednesday once NIFTY crossed 5809 and on Thursday it touched 6029 thus we were on track this week too as the rise in NIFTY was more than 300 points and more than 1000 points in SENSEX. We clearly mentioned in our Weekly Technical View that to continue the bigger uptrend we need a weekly close above 6021 in nifty and above 20056 for SENSEX on last two days of the week NIFTY made highs of 6029 and 6025 while SENSEX made high of 20084 and 20067 but both index failed to close the week above our suggested last and strong Resistance levels these levels were clearly mentioned about on Monday itself thus far last two weeks lows were precisely our Supports and highs were also our Resistance levels only.
WHAT WILL BE THE SCENARIO FOR NEXT WEEK?
Technical Analysis as a subject is a combination of multiple tools like Trend lines, Fibonacci numbers, Candlestick patterns, Moving averages, different types of Indicators, study of Volume etc. The motive of this study is mainly to identify turning points before any move in stocks/commodities/indices or for that matter in any instrument that is widely traded anywhere in the World. Our purpose as an analyst is to increase the probability of predicting such turning points using a single or multiple Technical tools at times especially when we predict EQUITY MARKETS, there are confusing signals when we try and use multi timeframe charts like Daily Charts and Weekly Charts or Monthly Charts. This weekend we are facing the same difficulty as study of multi time frame charts are really generating confusing signals we are explaining this using different sector indices and some major stocks.
Let us first talk about SENSEX and NIFTY the crack in the month of November-2010 was huge as per daily chart signals the rise in last two days of November and first three days of December can be termed only as a corrective rise but as we look at higher timeframe that is weekly chart the fall in November continued for three weeks and last week halted that erosion of values more over SENSEX and NIFTY both took supports at one of the most valid Support line which is the Upper Channel Line which lasted for almost a year so as on Weekly charts the fall of three weeks can only be a small correction after the indices broken out of channel and went up smartly from early September-2010 almost touching 2008 Highs now if the resent five days rise from 18954/5687 in SENSEX and NIFTY is only a corrective rise then they will break 19365/5817 respectively and thus enter again into sell mode targeting 18435/5595 but if in coming days these levels are not broken down and 5897/5857 Supports for NIFTY and 19635/19500 Supports for SENSEX works and Market bounces back sharply there will be Higher Bottom Formation On Daily Chart which will lead indices to cross major hurdles at 20056/6021
SENSEX WEEKLY CHART AS ON 03-12-10
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