WEEKLY TECHNI VIEW

GENERAL TECHNICAL VIEW

We would first like to post a SENSEX chart here which we had posted in our weekly chart book dated 13^th December.

And here is the updated chart of SENSEX.

It is clearly evident as one compare both these charts that SENSEX moved precisely in the manner in which we had projected its move 18^th days back.

Although there were some days which were disturbing the bullish projections but than on such days we had given some very clear levels below which only SENSEX could have entered bearish trend and none of those levels were breached by SENSEX during its upmove from 19000 to 20500.

Also we were very clear about the stock participation in the projected rally and we had been consistant in saying that the rally will be very very stock specific and so it is More interestingly in our con call on Thursday we said that without participation of Larsen /Reliance and Bhel this upmove is meaningless and on same day Bhel and Larsen went up while Reliance moved up on Friday. And in our Friday morning con call we pointed out that Banks must move up now and on that day there was some real good participation from banks as bank NIFTY moved up by 1.4%.

SENSEX

As shown on weekly SENSEX chart below one of the better Indicator called Stochastic momentum as just taken support on two differently angled Trend lines.

As shown on chart this Indicator provided a very good exit in the first leg of crash before the major crash in early 2008 and also the same indicator did give a very good entry in early march 2009 before the massive bull run that we have seen.

So considering this the  recent trendline support for this indicator is very important to watch in first few Weeks of January.

And later on if this Trendline gets broken it will be major warning for this bull phase.Already we have had lot of weakening signs in majority of Small Cap ,Mid Cap ,Psu ,Power And Banking Stocks.

For the coming Week looking at the completion of Double Bottom Pattern on Daily Chart any corrective fall upto  around 20100 will be a good buying opportunity for upside target around 21300.

NIFTY

For NIFTY also any dip during the coming week will get supported around 6028-6001 so such correction will be a good chance to enter long for an upside target of 6194 and than upto 6300 around.

On the weekly charts price wise there are two positive signs one is the double bottom pattern confirmation on daily chart and second on weekly chart NIFTY has entered back into the expanding structure.

While indicator point of view it will be positive if macd gives a buy cross this week which is in sell mode now and the adx on weekly chart is turning up which can be good to maintain upside momentum by turning up above 25.

We have been tracking bank NIFTY from quite some time now.

After the bearish expanding structure the banks were sold off heavily till last few days of the month of December 2010.

In last two days of the last week bank NIFTY has broken the downside resistance trendline and structure wise also a short term base building is visible on charts.

Bank NIFTY has an upside target of 12032 as mentioned last week and the other level to watch this week is 12141 and we expect a correction from there which should be ideal buying opportunity but we will have to watch carefully how bank NIFTY reacts from around 12032 and 12141 before entering long in a big way