SENSEX and NIFTY both met there downside targets three weeks back and there was a good bounce from those levels because at 5340 and 17825 for NIFTY and SENSEX respectively there were important supports in the form of 89 WEEK EMA and the rising CHANNEL LINE ,.
So it was obvious that index can find supports BUT as two weeks have now gone buy now DO NOT find that the price movement in last two weeks have got any great strength as on WEEKLY CHART.
Do remember that although on DAILY CHART of SENSEX and NIFTY there is still the HEAD & SHOULDER pattern as a structure but as mentioned CONSISTANTLY during the last three weeks that 5605 and 18725 are the MOST IMPORTANT levels for any good bull move to happen.
Incidently the supposed H&S PATTERN also has the above mentioned levels as BREAK OUT levels for such a pattern to get COMPLETE.
Even on the weekly basis the close was with a higher shadow, which suggests that there is significant selling pressure at higher levels.
18725 remains the major hurdle and if SENSEX continues downward move for a few more days the positive structure will NOT work which will lead to break 25th may lows and even January lows will be under threat.
The ADX is below 25 which suggests complete loss of MOMENTUM on EITHER side if the ADX jumps above 25 and SENSEX continues to drop then the downward movement wit gather momentum..
Supports are at 18125 and 17978 but a close below 18044 will be danger sign for bulls.
NIFTY :
5605 REMAINS the most important level for NIFTY and if NIFTY breaches 5434 AND 5387 ON CLOSING basis then there will be some real panic in the markets .
There is very much lack of interest in market these days so volumes have dried up SIGNIFICANTLY and for upside movement VOLUMES MUST pick up bullish hopes can revive if NIFTY closes a day above 5605 with HIGH volumes.
But please remember that LACK OF INTEREST and LOW VOLUME can easily lead to larger bearish trends.
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