weekly technical view for SENSEX AND NIFTY

SENSEX AND NIFTY TECHNICAL VIEW FOR THE WEEK AHEAD STARTING 20^TH JUNE 2011:

In the last week on Monday both SENSEX and NIFTY bounced back from supports and both completed HAMMER candle pattern on daily charts.

But on Tuesday itself in our DAILY TECHNICAL VIEW we suggested that both the index need a bigger bullish candle to CONFIRM the short term bottom for them tuseday markets bounced back but failed to close above given important resistance levels.

For SENSEX the level was 18399 and for NIFTY the level was 5521 on that day SENSEX made a high of 18380 and NIFTY made a high of 5520 BUT both index failed to close near their high and actually that started the weakness.

From Wednesday SENSEX and NIFTY started to produce big bearish candles and it was clear by then that the inverted HEAD & SHOULDER structure  was about to fail.

The weekly close for both the index is very weak and so  we presume that A LARGER BEARISH LEG is about to open infact it has been already ON but we will see its severe implications once SENSEX closes below 17786 and NIFTY closes below 5332.

As that happens January 2011 lows will be our first targets and below jan lows SENSEX will have a target of 16200 and NIFTY will have a target of 4848.

FAILURE OF A PRICE PATTERN TO COMPLETE AND ITS IMPACT :

Readers are aware that since long we have been EXTREMELY bearish for the year 2011.

But the INVERTED head &shoulder PRICE STRUCTURE prevented us this time to start giving positional sell calls from around 5600 although from around 17^th of may we advocated 18747 and 5605 as STRONG RESISTANCE area and also as our STOP & REVERSE LEVEL for SENSEX and NIFTY respectively.

We also very clearly suggested that the head & shoulder pattern will be complete ONLY after it closes above the NECKLINE and so any BULLISH hopes were only above these levels.

We also said that IF such price patterns fails to complete  than there will be very SEVERE downside .

Here is the example of  WHAT can happen if such a GOOD looking price pattern fails to complete

It happened now on reliance chart and here is the chart of RELIANCE with our comments.

EXPONENTIAL MOVING AVERAGES :

Our readers must have noted that while doing analysis of our markets we have been extensively using CROSSOVERS of the EXPONENTIAL MOVING AVERAGES in short EMA.

A few days back we noted that the 5-8-13 day EMA has generated a sell crossover in SENSEX and NIFTY combined with that happening on DAILY charts the same 5-8-13 EMA band is also in the SELL MODE already.

Interestingly 5 PERIOD EMA has given a sell crossover with 8 period EMA on  monthly charts of SENSEX and NIFTY.

HERE are all three time frame charts with these EMA BAND.

 here are few other charts of STOCKS / INDICES with my comments on them