Mastering Stochcharts: WEEKLY TECHNI VIEW

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 ?

Sensex:

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.

Nifty :

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