Mastering Stochcharts: WEEKLY TECHNI VIEW

SENSEX AND NIFTY LAST WEEK:

At the beginning of the week we said that there is a lot of confusion in doing analysis of daily and weekly charts but we expected a downside correction and from tuesday onwards as we found some technical evidences appearing on charts we confirmed that a downside move is coming .

For sensex our strong resistance level was 20056 and than the 61.8% Fibonacci retracement level which was around 20200 and sensex made a high of 20217 but could not close any day above 20056 showing weakness.

On the last day of the we wrote this in our daily technical view “Sensex is now on the verge of forming a lower bottom if it breaks 18954 yesterday it a low of and closed at 19242 now 19215 is 78.2% of the last rise it will be very very crucial to watch if there are still any evidence of sensex trying to make a double bottom kind of reversal pattern around this level “

On Friday sensex made a low of 19074 but recovered almost 500 points from low and closed at 19508 the structure on daily charts actually now looks as a double bottom around 19000 .

As for nifty 6021 proved a strong hurdle and as we mentioned this on last Friday “The stochastics is now entering oversold zone so it will be crucial to watch how nifty behaves around 5723/5690 but once below them 5595-5565 are next target for nifty”

Nifty made a low of 5721 our mentioned level to watch nifty was 5723 and now for nifty also 5700 around we can see a double bottom reversal pattern.

Sensex view for the coming week :

Although confirmation of the supposed double bottom reversal pattern is far away at around 20056/20217 there will be some other resistances that sensex has to cross and close above.an intraday move above 19610/19641 and than a close on any day above 19777 will be the first signal of a move to confirm a double bottom pattern on daily charts roc of sensex is showing some strength and with stochastics on weekly charts in oversold zone the move can gather momentum if sensex will have a close above 19777 which is a 61.% retracement of the last weeks fall.

Nifty :

As shown in this weekly chart of nifty and as we have been suggesting very clearly and loudly that the price area around 5700 for nifty seems to the strong support area which consists of multiple supports and although three major sector index banking/small cap and mid cap confirmed the bear grip by completing lower top lower bottom on daily charts the nifty is yet to form a loer top.

Downside targets can now open only on a close below 5690 for nifty and upside targets can open on a close above 6088 and intra week nifty will show strength if it can close above 5878 and than a decisive close above 5935 could initiate huge short covering because such a close will most probably prove the double bottom although as per rules nifty need a close above 6028 to confirm the double bottom.