WEEKLY TECHNI VIEW

TECHNICAL VIEW FOR THE WEEK STARTING FROM 25-04-2011 :

THESE WERE OUR COMMENTS LAST WEEK :

AND THESE COMMENTS ARE VALID FOR THE COMING WEEK TOO

“  A BEAR MARKET RALLY OR WHAT ??

There is no clear technical conclusion as yet

BUT WE STRONGLY BELIEVE THAT ONE WEEKLY REVERSAL PATTERN IN COMING ONE OR TWO WEEKS WILL HAVE VERY SEVERE NEGATIVE IMPACT ON MARKETS

                                                                               OR

A CLOSE ABOVE 20292 AND 6097 FOR SENSEX AND NIFTY CAN PRODUCE ANOTHER BIG RALLY UP SIDE CHALLANGING 2010 HIGHS.

The odds will be in favour of bears if indices can not cross their recent april highs next week 

PLEASE do remember that there are all chances that the late march-april 2011 rally will prove to a BEAR MARKET rally only.

 market may wait for the result season to have a conclusion of its own BUT yesterdays Infosys result and the markets reaction of a huge 10% crack can  be the markets suggestion of where it wants to go BUT AGAIN technically breach of certain levels and candle reversal pattern on weekly chart is necessary evidence that we will look out for in next 2 weeks time. “

SENSEX and NIFTY both were extremely volatile in the last weeks clearly because both bulls and bears are fighting it out for the next big move in either direction.

In our WEEKLY CHART BOOK of the last week we clearly mentioned that next two weeks will decide the future of our markets for the medium term and THOUGH our analysis weighed in favour of the next leg of bear market rally but we clearly said the we need a weekly close below the important trendline (upper end of the channel ) which we had drawn on both sensex and nifty charts.

Also there were other supports like 21 and 34 day ema and 38.2% retracement levels.one can see the updated charts and understand the logic of our arguments regarding these levels as during the week sensex and nifty tumbled earlier but took supports exactly at all those levels.

There are two things which we would like to point out. One is that we were perhaps a little bit more eager to catch the TOP at the top and second our supports in forms of the TRENDLINE , 21-34 DAY EMA ,5-8 WEEK EMA and 38.2% retracement level are more valid now as both SENSEX and NIFTY took support from these levels so in conclusion we now have CLEARLY DEFINED values below which we will presume that the next larger downtrend has resumed.

For sensex these values are 18976-18830 and for nifty they are 5697-5649 and do remember that we need WEEKLY CLOSE below these levels

BROAD MARKET :

We understand that due to increased liquidity and increased participation those days are gone when an analyst can have very high success ratio if he/she predicts the market JUST by doing analysis of A SENSEX or A NIFTY but one will have to keep in mind the broader market and sectorial indices much more closely than ever before.

And since we believe that sensex and nifty will remain in a BROAD HIGHER range for a few years and AFTER they complete the pending predicted LARGE  “ c “ wave we will witness lot of churning inside different sectors and so we have to define strong sectors and stronger stocks even among sectors which can beat the SENSEX or NIFTY in the future.

Two sectors BSE CGS and BSE POWER have got resisted at 38.2% retracement level and have completed BEARISH CANDLE REVERSAL patterns last week so WHEN NIFTY and SENSEX give us enough evidence of the fresh downward move stocks of these two stocks may witness severe selling pressure so keep watching them.