WEEKLY TECHNI VIEW

 TECHNICAL VIEW FOR SENSEX FOR THE WEEK AHEAD :

SENSEX : as expected sensex moved up 310 points and closed at 18518 .

Technically this jump can only be first day of a minor pull back rally of the very large leg of crash started from 19696 which was SENSEX high on 21^st april when on daily chart it completed A DOJI candle pattern.

Also this up move can be attributed to the EXTREME oversold condition of short term momentum indicators BUT SENSEX closed only one day JUST below 61.8% retracement and closed strongly above it very next day can have a little bit more positive impact on short term.

The 5 and 8 day EMA are placed at 18582 and 18738 so this rally can easily EXTEND up to these levels first and we will watch any weakness from around these levels ESPECIALLY if the rally extends for a few days this week then we will wait for the MOMENTUM indicators to reach in overbought zone and then we will watch out for CANDLE REVERSAL pattern on daily chart for further weakness.

Till that happens those who acted swiftly upon our advice to book longs even on delievery basis can buy back some of GOOD stocks which they have sold around 5900 .

WEEKLY CHART STRUCTURE FOR SENSEX :

On the weekly chart despite the strong 300+ points recovery the SENSEX closed with a big BEAR CANDLE below most of the supports except the IMPORTANT channel as on weekly closing basis.

FOR  A LARGER DOWNSIDE WAVE TO OPEN THE “ADX “ ON WEEKLY CHART MUST MOVE ABOVE 25 IN A NEXT ONE OR TWO WEEKS TIME.

This will happen if SENSEX does not recover SHARPLY in the coming week and even  A FLAT CLOSE  for the coming week may also help ADX move up.

ALSO watch the 89 WEEK EMA to get broken on weekly closing basis if we are to see a larger crash for SENSEX.

TECHNICAL VIEW FOR THE NIFTY FOR THE WEEK AHEAD.:

NIFTY  also closed below the SUPPORT line and also below the 61.8%  RETRACEMENT level on Thursday but on Friday it opened up with a GAP and then after some volatility closed back above the 61.8%  RETRACEMENT  which is 5473 and infact NIFTY closed above the support line too.

As shown on the chart the ADX is at 38 which is STRONGLY BEARISH MOMENTUM so if the NIFTY continues to move up for a few more days the ADX will initially move down but if the upside momentum gets STRENGTH then ADX will again move up BEARS will have to take care there BUT if the up move fizzles out at RESISTANCE the ADX will continue to go up keeping down side momentum intact.

There are very strong hurdles for nifty up to around 5696 as shown on different NIFTY charts

For the DOWN SIDE 5325 IS an important support where the 89 week EMA is placed and some Fibonacci ratios are also around 5350 so the down side will resume after a few days up or side ways move if NIFTY CAN NOT CROSS some hurdles as shown on charts.

NIFTY AND ELLIOT WAVE COUNT :

We had earlier presented our LONG TERM Elliot wave count for SENSEX AND NIFTY as per that NIFTY is in the LARGER  “ C “ WAVE down.

As shown on the below chart it seems that at present this supposed “C “ wave is unfolding in to an “ abc – x – abc “ form  of one smaller degree and NIFTY is in the SECOND abc corrective after finishing   THE “ X”Wave at 5963 so at present NIFTY is in the “A” wave of the second corrective which should have targets around 4800.

CRUDE CHECK :

Crude is always going to have DIRECT impact on our markets.

In early January-2011 we predicted the up side potential of crude up to around 110 USD was done then in march we said that crude has target of around 5100 (INR) ON MCX that target was also one strong resistance.

As shown on the CRUDE chart it is at some support after a few days of strong down move and it will be good for INDIAN FUNDAMENTALS if crude slips below 4200 on weekly  closing basis.