Monday, December 26, 2011


This will be the last WEEKLY TECHNICAL VIEW for the year 2011 and it is with a sad note for the status of the markets for the year.
It will be a monthly  quarterly and also an yearly close at the end of this week.
And on all the above HIGHER TIME FRAME charts it is only BEARS who rules as of now.
All averages are down all indicators are showing weakness to continue just a little positive candle pattern called HAMMER in some good highly traded stocks as on weekly chart  suggests that some stocks may have started to attract some long term funds.
For the next week if NIFTY closes above 4840 and if SENSEX closes above 16133 we can have some hope for the early part of 2012.
Our targets of 15154 and 4538 for SENSEX and NIFTY were hit and we have seen a relief rally which as of now seems to be a corrective rally only.
Since we believe that the price zone of 14600-14900 and 4470-4361 for both index has got some very interesting FIBONACCI ratios present we will have a strong rally from these zone but even 4538 and 15154 has got good Fibonacci supports if NIFTY closes above 4840 we may have already been in for a good rally ahead.
Time to be in buy mode for short term is nearby that is our conclusion for the last week of 2011.
A close below 4630-4599 and NIFTY will have target zone of 4538-4361 again.

A LOOK INTO 2012 :
We will come out with a detailed report for 2012 covering a few sectors and individual stocks but at one glance 2012 seems to be a NON EVENTFULL YEAR as far as the long term picture is concerned.
As described in October 2010 and in January 2011 SENSEX has entered a multi year CONSOLIDATION PHASE which could last till 2015 before finally resuming a GREAT BULL RUN TO EVEN REACH A 50K MARK.
The broader range for the year 2012 can be between 13000-17000 and 4200-5000 for SENSEX and NIFTY respectively.
The whole year could have three legs starting with some bullishness we will see one big crack up to around 14600 in the first few months before we set in a STRONG and LARGER corrective inside the BEARISH C WAVE that we are in.
The final leg could again be bearish to end 2012 on a dismal note again.
We advice readers to follow us with our daily/weekly technical views through the year as the charts unfold the future.
We will be surprised if SENSEX/NIFTY can produce a back to back BULL CANDLE after they are about to finish the year 2011 with a big bear candle.
But markets can do anything so we will track them on day to day basis with an assurance not to let our readers miss out any thing big on either side.

Thursday, December 22, 2011

Weekly Charts Book 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.


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.

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.
BUT WHY 4538 ?
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.



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.

Thursday, November 24, 2011


SENSEX: there is no stopping to this SEVERE downtrend both our targets for SENSEX on the downside were reached.
As our advice was very very categorical and straight forward to SELL ON RISE we again feel satisfied being on the right side of the market .
It seems that 14900 around SENSEX level is coming very soon,we have certain good Fibonacci ratios and a falling channel support around 14900 so we will watch carefully what happens there.

NIFTY : we suggested SELL ON RISE even for NIFTY FUTURES when it breached 5089 and we had said in our weekly chart book that BANK NIFTY will decide the trend of the markets for sometime
we also projected targets of 8300 for BANK NIFTY SO banking stocks started the crash this time and took everything with them.
MEDIA will report there is blood bath on D STREET but we anticipated 15000 SENSEX level way back in January 2011,our next target is around 13000 .
4640 is one support level and as we have seen a PANIC selling got triggered yesterday BUT found support at 4640 our two targets were reached but we feel that 4538 is coming soon.
If NIFTY manages to close back above 4770 then only there can be some corrective upside.
More DANGER signals are coming from DOW JONES weekly chart as its present price STRUCTURE LOOKS very similar to the CHART STRUCTURE of NIFTY/SENSEX as in JANUARY 2011.

Sunday, November 20, 2011


SENSEX and NIFTY both got some support at one BULLISH GAP on EOD charts AND as suggested in our daily TECH VIEW on 18th November.
But through the week both indices fell sharply as SENSEX closed below 17200 and as NIFTY closed below 5156.
Also note that we had given clear advise to sell on rise once NIFTY failed to close above 5205 on 14th November.
We said on Friday that NIFTY will have a corrective rise from the BULL GAP between 4827-4872 levels and NIFTY made a low of 4837 and close at 4905 and we had given a down side target of 4833 which was achieved on Friday too.
In our weekly chart book dated 081111 we said this,

“For NIFTY a close below 5156 and for SENSEX a close below 17100 will put all the bullish hopes to an end.
The stochastics on weekly chart for both indices is now reaching overbought zone so it will be better if both reaches their targets during this week else it will enter another corrective down side from the next week or so.
Such small range bound markets are difficult to predict and we shall wait for the breach of small ranges.
And by all means the last upside still does not look to be a new BULL RUN.”
The last sentence said it all and once again after catching a massive upside up to 5400 we did not miss the severe down side as well.
16641-16744 is the price zone which will prove strong resistance if SENSEX moves up in the next week.
we can not ignore the bullish gap support at 16148-16044 zone but,the follow up bounce must be strong enough  to close above 16744 for a meaningfull rally.
For the medium term perspective 17200-17300 zone becomes THE MOST IMPORTANT TREND DECIDER LEVELS NOW THEN EVER BEFORE.
For NIFTY there is a support at 4837 level as it is a BULLISH GAP area and as NIFTY has produced a LONG LEGGED DOJI candle reversal pattern we may see a few days up move .
4989-5033 price zone is an important resistance zone for NIFTY and only a close above it can have something for bulls and every such rise up to 5156-5177 will be considered as CORRECTIVE only.

As we have been suggesting since 8th November 2011 that STRENGTH OR WEAKNESS in cnx BANK NIFTY will play a very crucial role and as on Friday it seems that BANK NIFTY has weakened further so this particular index is going to to be A MAJOR DRAG for our markets for next few months.
The supposed inverted HEAD & SHOULDER pattern is about to fail and so it will have further damaging impact on BANK STOCKS.
It is prudent to have a look at what we projected about SENSEX and NIFTY FOR THE YEAR 2011 IN PRESENT SITUATION because one/two years BULL AND BEAR cycles are part of long term SIGNIFICANTLY BULLISH PICTURE.

There is a strong possibility of NIFTY AND SENSEX getting some supports around 4720 and 15700 levels respectively and if we don’t see a major recovery from there NIFTY will find strong support around 4538 BUT there will be a FREE FALL below 4500.

Tuesday, November 8, 2011


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Friday, November 4, 2011


SENSEX: today we gave SENSEX support level of 17273 and it made a low of 17276 and bounced back sharply from lows to close in GREEN.
Remember we have been suggesting that the zone of BULLISH GAP and previous resistance levels of 17100-17215 is very crucial support and a bounce from there will be positive.
17278 is the level to watch on closing basis for next few days as a STOPLOSS level for short term longs

NIFTY : for NIFTY also our support level was 5205 and NIFTY made a low of 5201 also since last 3 days we have been clearly saying that the GAP level of 5219 and 5156-5177 zone is crucial support and today future NIFTY made a low of 5219 and closed above 5300 which is very positive.
NIFTY looks to have ended the small correction and next targets seems to be 5420-5475 zone.
Stoploss for short term longs should now be placed at 5201 on closing basis.
Also there is a BEARISH GAP at 5314 NIFTY level so some profit booking is expected around that level.
A close above it will take NIFTY up to 5420-5475 levels.