TECHNICAL VIEW FOR
SENSEX & NIFTY FOR THE WEEK STARTING FROM 19-12-2011
Both indices continued to drift lower
and in fact it was a real panic selling which was seen on Friday as both SENSEX
and NIFTY hit 28 Month lows.
Technically a close below 4700 for
NIFTY and below 15700 for SENSEX is a very bad sign as now on the charts it
looks to be a BREAK DOWN although we have to give the Double Bottom probability
as if in next one or two days NIFTY again closes back above 4700 there will be
some hope.
This view is for Daily Charts but as
on Friday the Weekly Chart structure shows no HOPE at all.
Our targets of 4538-4350 for NIFTY and
14900-14600 for SENSEX are now very much on the cards.
Markets can plunge much more than
these levels in the current bearish scenario but as we all know CORRECTIONS are
always there and as yet we have not seen any SIGNIFICANT correction on MONTHLY
BASIS and looking at certain Fibonacci ratios present at 4538/4350 and 15155/14684,
we feel a larger corrective rally should begin from the above ZONE OF LEVELS.
We will come out with LEVELS to watch
for confirmation of such a rally in due course.
Since October 2010 and more so from
January 2011, we have NEVER changed our view that our market is in a STRONG
BEAR GRIP and we have never termed any upside rally as a NEW BULL WAVE all such
small or larger rally were clearly labeled as a BEAR MARKET rally only and
still we have not missed any good and tradable upside moves in the last one
year too.
Our first important target for 2011
has been 15000 SENSEX which was presented using various technical tools in
January 2011.
Looking at the severe selling pressure
seen in the crash of last Friday, it seems that now we are entering a PANIC stage
of this 13 month long BEAR MARKET.
The price zone of 4538/4350 for NIFTY
and 15155/14684 for SENSEX seems a good support zone and the most noticeable
fact is that ALL market participants are now turning to be BEARISH Indian
markets at this juncture JUST before we are about to reach our year long down
side targets.
NIFTY WEEKLY CHARTS
SENSEX WEEKLY CHARTS
We believe that a PANIC LOW IS ON THE
CARDS.
There will be a REASON coming soon; an
event which wills TRIGGER FEAR and one bottom will get hit soon.
As we look at the following Weekly
Chart of broader market index S&P CNX 500, we can feel the real heat of the
situation which is entering a PANIC ZONE.
This index is at 3647 and important
support is seen only around 3500 that is still a fair distance away.
S&P CNX 500 WEEKLY CHARTS
I was almost alone when I said in a
very detailed article with number of LOGICAL TECHNICAL REASONIG that A MAJOR
TOP IS NEAR BY on 12th October 2010 there were very few who even
tried to believe or digest my view and now even the RESERVE BANK GOVERNOR is
admitting that the economy is SLOWING DOWN .
MARKET knew very early that the
economy will slow down or that there will be a crisis in the EUROZONE or that
INDIAN RUPEE will tumble to all time low or about the HIGH INTEREST RATE REGIME
or any other fundamental reason that almost everyone is aware of NOW.
And TECHNICALS is the best tool to
know what market is trying to say.
Our experience suggest that its time
of bargain hunt when authorities do admit about economic slowdown but A PANIC
LOW is required here in the target zone of 4538-4350.
What we are trying to suggest here is
NOT that we are going to hit a MAJOR BOTTOM for sure but at least an
intermediate bottom should be coming soon and the possible up move will be
corrective only but may be larger than earlier correctives.
If you look at the Monthly Charts it
is a clear down move without any SIGNIFICANT correction so we expect a
corrective up move which will be a LOWER TOP formation on Monthly Charts.
IF THE PROBABLE DOUBLE BOTTOM PATTERN
FAILS TO DEVELOP AND WHICH IS MORE LIKELY TOO NIFTY WILL BE HEADING TOWARDS
4538 AND 4350.
BUT WHY 4538 ?
A FIBBONACI MAGIC AGAIN,
1.27% (4514) and 1.618% (4355) are
Fibonacci retracement of the last leg of up move from 4639 to 5099. Watch NIFTY
charts of August presented here.
NIFTY DAILY CHARTS
NIFTY WEEKLY CHART AS
ON 26/08/2011
NIFTY
DAILY CHART AS ON 26/08/2011
We derived at 4538 as an important
destination for NIFTY almost four months back and one RECENT corrective rally
in NIFTY from 4639 to 5099 also suggests at 4514 as we use a particular
Fibonacci ratio for this rally that is what & why we call it a FIBONACCI
MAGIC.
Market
rebounds as Moody's raises India's local-currency debt rating to investment
grade
Key
benchmark indices surged to attain their highest closing level in nearly one
week after Moody's Investors Service today, 21 December 2011, raised India's
local-currency debt rating by one level to investment grade from the highest
junk grade. Higher global stocks also aided rally in battered Indian shares.
Comments by a senior government official that the government is looking at all
options to attract foreign capital inflows also helped lift investor sentiments
as the Sensex snapped a five-day losing streak. The market breadth was strong.
The BSE Sensex jumped 510.13 points or 3.36%, up about 310 points from the
day's low and off close to 40 points from the day's high. Exporters and
resource firms led world stocks higher as renewed optimism about the health of
the global economy boosted risk appetite.
The
BSE Sensex jumped 510.13 points or 3.36% to settle at 15,685.21, its highest
closing level since 15 December 2011. The index jumped 552.23 points at the
day's high of 15,727.31 in late trade. The index rose 201.96 points at the
day's low of 15,377.04 in early afternoon trade.
The
S&P CNX Nifty jumped 148.95 points or 3.28% to settle at 4,693.15, its
highest closing level since 15 December 2011. The Nifty hit a high of 4,707.35
and a low of 4,601.95 in intraday trade.
The
BSE Mid-Cap index gained 1.29% and the BSE Small-Cap index rose 0.94%. Both
these indices underperformed the Sensex.
The
total turnover on BSE amounted to Rs 1924 crore, higher than Rs 1908 crore on
Tuesday, 20 December 2011.
The
market breadth, indicating the overall health of the market, was strong. On
BSE, 1,672 shares advanced and 1,097 shares declined. A total of 104 shares
were unchanged.
SENSEX : as expected SENSEX rebound strongly from support
levels as NIFTY reached a precise target.
We suggested a strong bounce back from these levels long
back.
EXTREME oversold condition of MOMENTUM indicators can be one
reason for such a bounce back.
SENSEX has closed above 15478 in a strong manner and so it
has entered well into the RESISTANCE ZONE which is a first good sign we expect
SENSEX TO REACH 16133/16193 in this leg first.
We will watch the WEEKLY CLOSE and will try and find out
next target levels.
NIFTY : NIFTY bounced back almost 170 points from our target
of 4538 which is clearly a very strong move.
We have been saying that the bounce back from 4538 will come
from COMPLETE NON BELIEF.
NIFTY has closed at another precise level which we discussed
yesterday at 4693.
Although the good indication came from FUTURE NIFTY as it
has closed at 4722 which suggests that it should be a BUY ON DIPS on intraday
corrections for up side targets of 4779 and 4839/4861.
Caution
is advised if NIFTY closes below 4599.
