Thursday, March 24, 2011
Sensex: sensex was not able to close above 18259 still it is a very good close as it closed near to its day high that suggests that at the end of the day all selling near highs was consumed successfully we need a confirmation of the uptrend and we will get it after sensex closes above 18439.
Support for today is at 18041 and resistance at 18259 and 18354.
Nifty: for nifty first intraday hurdle was 5442 and nifty crossed that level very early in the day and next level was a close above 5483 and nifty closed at 5481 that shows the precise importance of suggested resistance level.
The days candle is big positive so next immediate target should be a close above 5537 and if that happens in next two days the ADX which turned up INITIALLY showing increase downside momentum BUT it will continue its up ward journey in tune with the INCREASING upside momentum.
Support at 5428 and resistance at 5510.
Tuesday, March 22, 2011
Sensex : sensex made a low of 17892 which is nearly 78.6% retracement of the last leg of up move and more importantly it is exactly at the rising channel support line this channel development was suggested in our earlier technical views.
We STRONGLY believe that next 2-4 days will decide the future of markets for the month of april -2011 if sensex remains here in a small range below 18329 we will see February lows getting broken in the month of april and if sensex closes above 18329 and then 18463 there can be a smart 1000+ points rally in sensex in the month of april 2011.
For nifty the most important trend decider level should be 5537 but a positive trigger can come if nifty closes above 5483 and as suggested in sensex view next 3-4 days will surely decide the future of nifty move for the month of april.A dull and sideways move especially below 5483 or maximum below 5537 with higher shadows in eod candles for next few days will suggest some more bad news coming especially on oil front and on the other hand a strong close above 5483-5537 will cheer bulls for the month of april
Monday, March 21, 2011
Technical review of the week ended 18-03-2011:
Last week was also the week in which markets traded in a small range.
This range bound markets was very categorically anticipated in our daily and weekly technical views since a few weeks now.
For nifty our support of 5376 worked on Tuesday as nifty made a low of 5373 and then for next two days our resistance of 55531 worked as well .
Nifty made a high of 5535 on Wednesday but closed at 5510 and our critical level of 5442 worked for two days as nifty somehow closed just above it at 5446 on Thursday but then as we suggested on one chart in our daily technical view that every rise can be shorted till 5531 is taken out on the closing basis markets crashed on Friday again closed at a precise support level of 5373.
For sensex terms we said clearly on 15th march that short every rise till sensex closes above 18440 sensex made a high of 18444 and 18354 on 16th and 17th but was not able to close above 18440 and the resultant effect was that sensex closed at 17849 loosing almost 700 points from our STRONG resistance level.
This was sensex chart we presented on 15th march.
We would like to take up a detailed study of BSE METAL index using three different indicators and plotting them on daily and weekly charts.
From this BSE METAL daily chart one can see that the ADX which measures momentum of a move in either direction has reached above 21 which suggests STRONG momentum on the downside once adx reaches above 25 and stays there for 2-3 days metals will really start melting very fast so watch it for next few days the ROC and the STOCHASTIC MOMENTUM indicators are both below zero and both have broken supports so from this daily charts it looks that once BSE METAL index closes below earlier supports at 14832 there will be very speedy crash coming in metal stocks.
As we go one period higher and study these indicators on weekly chart of BSE METAL one can see that even on weekly chart the ADX has turned up and reached 17 if BSE METAL index can not give a strong upside close on weekly basis in next 1-2 weeks ADX will pick up more downside momentum even the ROC and STOCHASTICS MOMENTUM have been below zero levels and are in clear SELL mode.
The only hope for this index on weekly chart is the BASE trend line of the TRIANGLE and the 89 week ema so on the weekly basis once these two supports are broken we are to see STRONG selling pressure in BSE METAL index.
BSE REALITY BSE PSU AND BSE CGS are the most hit sectors in market correction since November 2010 and we can see at a glance to the bse cg index that our advice to be in cash way back in noveber 2010 was very timely as the saying goes MONEY SAVED IS MONEY EARNED.
SENSEX view for the coming week starting from 21-03-2011:
There is no change in the MAJOR directional prediction of MINIMUM 15000 for sensex for the year 2011 but the recent sideways phase may have confused many traders as it lasted for six weeks but from the beginning of last week we provided enough technical evidences that this phase should prove corrective DISTRIBUTION only and last Fridays big sell off provided a good trigger to the bears to crack the feb lows.
Still the 89 week ema and the trendline has to get broken to confirm the start of fresh panicky down move.
We also suggested about the probable topping pattern in DJIA and other major Europe indexes.
For this week sensex has now very STRONG resistances at 18104 and 18353 and has some supports at 17718 and 17470 and a weekly close below any of these two levels should most probably start a bigger crash.
For nifty 5531 was our suggested resistance level through last week and it proved to be strong enough.on daily chart we had drawn a second resistance line below the neckline which was earlier shown as resistance line.
Also nifty has strongly closed below the 8-13-21 ema band on daily chart with a big BEAR candle on Friday last.nifty is also trading inside the keltner band and on Friday it has closed way below 20 day ema inside the band.
All in all a DISTRIBUTION phase will confirm another stronger downtrend on a close below 5338 for this week nifty has resistance at 5442 and 5531 and support at 5338 and 5253.
Friday, March 18, 2011
For sensex the 18350 level is attracting huge selling pressure as we have seen in last few days so now onwards a close above 18463 will make this short side traders to rush and cover their shorts so the close above 18463 on either today or Monday is an event to watch.
On the down side yesterdays close at 18126 is very very near to our support at 18050 and to open further down side sensex need to close below 18050 and then to confirm bearishness it has to close below 17920.also watch macd on sensex chart because if sensex can not move up now it will give a sell call.
5531 proves to be a strong hurdle as in sensex a close or sustained move above 5531 for 10-15 minutes will spurt nifty to 5567-5609 very fast.
5442 is yet to get broken in yesterdays afternoon selling nifty went down to 5435 but closed at 5446 just four points above our critical level.
In nifty the range has now been NARROWED down to nearly 100 points.
Watch 5373 and 5531 on closing basis.
Thursday, March 17, 2011
Sensex : sensex sustained above 18326 in early morning trades and so later in the day made an attempt to cross and close above 18463 and it made a high of 18444 but just could not close above our decisive level.
As can be seen easily our markets have started to dance on tunes of the world markets atleast at the open and there are wild swing in the world markets too so one or two days positional trading has become dangerous.
That is why we recommend that traders must wait for breakout of the trading range which is largely between 18737 and 18052 for the last few days and a decisive close above or below can give some realy good trades on either side.
Although on the upside now even a close above 18464 should become a good trigger.where as on the downside a close below 18052 may put an end to the bull efforts.
For nifty it was good initially for day traders as nifty sustained above 5479 and it even went up to 5535 where as our level was 5531 above which nifty must give a close to sustain its strength overnight.
On the downside nifty must not close below 5442 but even if it closes below 5442 5373 is the ultimate trend decider level.
As our markets are proving their resilience against the tsunami in world markets it is going to prove better in the long run as india is going to be a far safer destination to park foreign money compared to japan and other earthquake prone countries for the short term it is a big question mark how Indian markets behave if dow and dax and ftse have already shown signs of major tops in place for them.
Wednesday, March 16, 2011
The world markets did face very huge sell off but sensex showed some unusual strength but technicaly speaking it was 61.8% retracement level at 17949 which supported sensex and it was successful in closing above an important level of 18052.
A sustained move above 18326 is needed for strength to continue and then a close above 18439 can easily give a lift to sensex of another 500-700 points in coming days.
This is turning out to be a complex corrective rather then a simple abc flat correction as sensex finds support at 61.8% of the last rise.
For nifty 61.8% retracement level was 5376 and yesterdays panic low was 5373 and here also close is above 5408 now for today a sustained move above 5479 will be a clear signal for short term strength and then a close above 5531 will be a good bullish trigger for another 100-200 points up move in nifty.
Tuesday, March 15, 2011
SENSEX did managed a close above 18369 and closed exactly at 18439 which is the precise level of trendline resistance shown on last Friday it will be very interesting and crucial if sensex is able to cross yesterdays high and trades above it consistently for first 1-2 hours and if that happens it will be good for short term bulls.
On the down side the ema band between 18300-18345 and a high at 18368 should act as support.
We mentioned here that it will be positive for short term if nifty closes above 5531 and nifty managed to close exactly at 5531.
For further confirmation of bullishness nifty must trade above 5531 for 1-2 hours today if that happens one can go long in nifty for short term with targets at 5609-5658.
On the down side there are good supports in the forms of ema band which is placed at around 5481-5498 area. And we believe that to sustain this bullishness nifty must not close below 5442 if nifty closes below 5442 within 1-2 days it will have negative impact.
Monday, March 14, 2011
Technical review of the week ended 11-03-2011 :
There is not much to talk about the markets for the week ended 11th march.
But the general short term trend remained DULL and SIDEWAYS which was in line of our analysis being presented since last two weeks at least.
It has been a BROAD RANGE between 18058 and 18583 for the past week and we did mentioned that for any bullishness 18669 must get broken on the upside and for the downside 17943 must get broken to open up another major leg on the downside.
And both sensex and nifty got resisted at the suggested RESISTANCE levels and got support at the mentioned SUPPORT LEVELS on the last week of the day even when the BAD news about a massive earthquake and a horrible tsunami virtually devastated japan supports of nifty 5408 and 18058 for sensex worked as sensex made a low of 18063 and nifty made a low of 5411 and both bounced back off those lows.
How IS THE CURRENT PHASE OF OUR MARKETS IN TECHNICAL TERMS ?
Our markets have been seeing a RANGE BOUND movement since 11th February it has been twenty trading sessions since both sensex and nifty made lows of their current BEARISH trends .
Sensex anf nifty both have taken support at the LOWER end of the earlier year long channel and respective 89 day EMA but since then the move has been range bound BELOW 200 day ema and both index have been resisted at their 38.2% retracement levels suggesting clear weakness.
Such phases in general can be termed as DISTRIBUTION phase and once they breach their immediate supports they once again start their down trend.
The only CAUTION remains that prices MUST not breach their established RESISTANCE levels else such supposed DISTRIBUTION phase can turn out to be ACCUMULATION at lower levels.this is why we have been suggesting stronger and fresh BEARISH LEG ONLY below some technical levels.
Here is a perfect example of how a distribution phase can turn out to be an accumulation phase.
One can clearly see how after a crash bse metal moved in a broad range which earlier looked to be DISTRIBUTION but as it broke out of the RESISTANCE it turned out to be AN ACCUMULATION.
SENSEX FOR THE NEXT WEEK :
Sensex may remain in the same broad range for one or two weeks more and we should simply wait for sensex to answer the big question of where it wants to go instead of guessing its move ESPECIALLY when it trades in a RANGE.
Upside resistance around 18700 and the blue NECKLINE and down side support at 18058 and 17858 and TREND decider level should be a close below 17693.
The MORE sensex remains in this range the MAXIMUM probability of its crashing below February lows.
For the coming week there is still a possible small ranged movement but who knows !!!
For the upside move a strong close above 5531 is a must but strong hurdles at 5567-5609 and 5758 level and on the down side first 1-2 close below 5408 and then a strong down close below 5338 would signal and end to the distribution phase.
Bse bankex , bse metal and bse it looks to start further down side moves in coming days and as shown here on charts INFOSYS AND TATA STEEL are at some supports but looking weak if they breaks supports it wil be difficult for indices to remain firm.
Thursday, March 10, 2011
There is another gap down opening in sensex such an event is very RARE when sensex gives a GAP fills that gap in a few days AND again creates a gap in the same direction of first GAP and observation says that such gap becomes very crucial hurdle in deciding future trend.
So watch todays gap on SENSEX chart and weather this GAP remains unfilled or it gets filled will play crucial role for the future movement of sensex. This gapped area is 18430 -18469.
So for today 18430-18469 will be important resistance and 18058 remains support and consistant trades below 18058 will be STRONGLY BEARISH for the sensex.
For nifty this gapped area is 5516-5531.
We would like to see movement of ADX if nifty falls down heavily and especially if nifty closes below 5408 and remains below 5408 for 3 days then it will be end for the current small corrective phase but it would be far more convincing if adx value rises smartly in a few days time.
Support at 5408 and 5366 for nifty and resistance at 5516-5531.
For sensex our resistance level was 18603 and sensex made a high of 18583 and two efforts during the day to cross 18603 were failed sensex closed marginally higher took intraday support at 18303 where we suggested support at 18273 so even in a dull and range bound market both levels worked.
18583 should be a difficult ask for sensex today and a close below 18303 and then 18058 is an absolute must to end this small corrective rally.
We suggested 55567 as an important resistance and nifty high was 5563 our down side support level was 5473 and nifty low was 5477.
We categorically suggested a few days back that this market is going to be range bound for 10-12 days and it has behaved in the same manner.
Nifty need a close below 5477 and 5408 for triggering another downside leg.
Wednesday, March 9, 2011
Sensex: sensex successfully closed the unfilled gap of yesterdays open and Fridays low which should be considered a positive technical factor for the short term.
But the overall scenario remains more or less sideways unless and until the NECKLINE of the supposed DOUBLE BOTTOM pattern is crossed.
For today sensex has supports at 18277 and 18058 and has resistance at 18603 and 18737.
The gap that we mentioned about yesterday has just been filled yesterday a sustained move above 5525 can further take nifty up to 5567 and 5603 and these are resistance levels also.
On the down side nifty has support at 5473 and 5408 and for the BEARS to have their control again nifty has to close below 5408.
The ema band as shown on chart has turned up and prices have closed upon this ema band but we need to watch the BUY CROSS and the NECKLINE on nifty chart to confirm higher levels.
Monday, March 7, 2011
General technical view for the week ended 04/03/2011 :
We said this about sensex last week,
“ SENSEX made a HAMMER on Daily Chart on Friday but it need a big bull candle as a follow up to confirm a short term bottom and although there can be a Double Bottom Pattern on Daily Chart looking at the price structure. On weekly chart there is more possibility of a few days sideways move if 17400 is held “
And this for nifty
“For this week, NIFTY has support at 5232 and 5177 and resistance at 5338 and 5369 and bullish possibilities may open up for short term on a NIFTY close above 5369.Oversold Stochastic Indicator & Hammer Candlestick pattern on Daily Chart just before the Budget Day, There can be a short term up move up to 5414-5459 only if 5175 is held on the Big Day but if 5175 gets broken on the closing basis, first target would be 4945 & then after 4777.
17400 was held for sensex and 5175 was also held and so price structure looks like a DOUBLE BOTTOM pattern on daily chart but real strength can come ONLY if sensex closes above 18691 and nifty above 5657.
Budget day and the next day was highly volatile budget was welcomed by the markets but the weakness in dow and a huge rise in crude has and will have its impact on our markets soon.
Remember that in our 2011 review as we presented STRONG bearish view for our markets we considered up coming bullishness in crude as an important parameter and political disturbance in middle east turned out to be reason for bullishness in crude.
What do we expect for our markets this week ?
For sensex we can not give any clear cut view this week also.
Our view for the coming week is based on penetration of levels as for sensex a close above 18691 and especially 2/3 days strong close above 200 day ema which is currently placed at 18669 is a must for ANY bullishness and infact such a close will be a boost for future of sensex for the next 2/3 weeks BUT looking at the price structure which looks more like a DISTRIBUTION phase a close for sensex below 17943 will confirm our view as the stochastic on weekly chart is nearing overbought zone and so a close below 17943 next will may start a bigger down move which will take sensex to new lows around 16087.
Our view remains the same for nifty too for the next week as level wise a strong close above 5657 for 2/3 days nifty can lead up to 5750 or even 5903 but in Elliot wave terms the corrective phase since last 16 days looks like an A B C FLAT corrective which should end sooner or later IF nifty can not close above 5657 in coming 1/2 weeks
For this week a close below 5338 will most probably end the whole corrective and which will lead nifty to breach February lows.
Friday, March 4, 2011
Sensex : amid huge intraday volatility our support of 18218 was intact as sensex made an intraday low of 18253 on the up side 18691 remains the first major hurdle for sensex and then comes the NECKLINE of a probable double bottom pattern for us it is a DISTRIBUTION phase which is channeled.
Resistance levels are 18677 and 18783 also these values are of 200 and 89 day ema for sensex.
For today 18603 is the first level to watch and for support 18253 and 18218 are two levels to watch.
From the highs around 18735 maximum there will be another leg of down move and the price structure and strength of that down move will be a decisive one so in our opinion next week will be the major trend decider week.
For nifty too our zone of resistance was 5567 and 5603 and nifty high for yesterday was 5570 there is strong resistance at 5624 for nifty and a close above 5599 is an absolute must for the upside to continue for one or two more days.
But nifty will come down again from the resistance area of maximum 5603—5660 and the fall will be crucial to watch as again if the fall remains fast the sideways move for the past few days will prove to be distribution only.5433 and 5468 are two support levels for nifty for today and for Monday too.