WEEKLY TECHNI VIEW

Technical review of the week ended 11-03-2011 :

There is not much to talk about the markets for the week ended 11^th 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  11^th 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.