WEEKLY TECHNI VIEW

The most important question  now is that weather the recent rally is JUST a bear market rally or it is the new bull run ?

We have tried to answer this question and we have tried to put forward some probabilities and the ways and means to get the proper answer from future.

First let us clarify one important thing as far as our technical views our intraday and positional calls.

We are very much pleased the way things have gone by in recent months and we are much more happy how our dealers and branch/franchise personnels have started to response our technical calls and it would be very much clear now that we have such flexible technical views that we will not miss any big move of markets or major stocks in a big way on EITHER SIDE,

The MAIN reason for this is that we always FOLLOW markets and we NEVER hope the market to follow our VIEWS.

A FEW POINTS TO NOTE ABOUT THE RECENT RALLY :

Index wise the current rally has very strong momentum there has been different EMA crossovers a few indicators like ROC and RSI has turned up positively there has been BUY cross from MACD and most important feature is that the rally has touched the 61.8% retracement level straight away.

Besides all these it will be PRUDENT to note that so many times BEAR MARKET rallies can extend up to 61.8% or even up to 80% of the retracement levels.

Since the recent up move as on daily charts has gone up to 61.8% straight away it creates doubts because many a times such STEEP rallies do follow by equally steep falls but we would wait and watch any correction that comes in and it will be very interesting to watch how SUPPORTS works in future.

We have seen the 5/8/13 day EMA cross over worked in favour of bulls when it happened third time because of such steep rise the 5/8/13 day EMA band has risen sharply so we will watch how these emas gives support to sensex and nifty in corrections and how the short term ema gets support at the higher term ema.

PRICE tends to get support at 5 ema or 8 day ema if such STEEP rallies are to continue after BRIEF CORRECTIONS or if the correction comes RANGE BOUND then the 5 day or 8 day ema TENDS to get support from 13 day ema so FAILURE OF any of these will be first INDICATION of end of this BEAR MARKET rally if it is not new bull wave.

We watch CANDLE reversal pattern on WEEKLY chart and if we find any BEARISH candle reversal pattern then we will presume that this is A BEAR MARKET rally only.

We have drawn a SUPPORT line on sensex and nifty charts presented here if in coming weeks sensex or nifty closes below it then the fresh down move will resume.

LACK OF BROADER PARTICIPATION :

Another technical observation which suggests that the recent strong rally could turn out to be only a BEAR MARKET rally is the LACK of participation from broader markets in a big way.

As can be seen from some of the charts presented below sensex nifty and bankex has retraced up to 61.8% bse it out performed the sensex as it got retraced by 78.6% BUT most of other sector index retraced below 50% while small cap and mid cap index retraced just 38.2% STILL the WEAKEST sector reality index could not retraced even 38.2% till date .

Such under performance from the broader markets is the real cause of worry.

Still before calling the recent highs as ANOTHER LOWER TOP we would wait for further confirmation.

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