TECHNICAL VIEW FOR SENSEX & NIFTY FOR THE WEEK STARTING FROM 04-07-2011:
From the supports around 17300 SENSEX has marched up almost 7% while NIFTY rallied in the same manner it found support around 5177.
Both the index have crossed the important 200 DAY EMA and their important RESISTANCE at 18725 and 5605 but both found RESISTANCE on Friday at their respective 1.27% of the last leg of fall and closed below their 61.8% retracement of the bigger leg of fall started from april 2011.
We mentioned 19042 and 5716 as important levels of resistance and expected correction both SENSEX and NIFTY almost touched these levels and retraced to close lower.
We had suggested earlier and we repeat that such one way up moves without any meaningful CORRECTION are vulnerable and can be followed up by VERY HIGH volatility and may not sustain.
So it will be very good if markets enter a brief correction and then pick up again for the health of this up move.
SENSEX and NIFTY closed the week on a strong note and have given a very good follow up to the last weeks strong CANDLE WITH A BIG LOWER SHADOW both indices met with our targets given in our WEEKLY CHART BOOK last week.
But as we look at these daily charts SENSEX and NIFTY has closed below their important RESISTANCE LINE which we have been drawing since more then a month now.
SENSEX :
IF we see a brief correction which remains slow there are possibilities that SENSEX AND NIFTY will cross these RESISTANCE AREA and they may test the APRIL 2011 highs in a few weeks time.
So after a brief correction we can have SENSEX target around 19700 and NIFTY target around 5944 in a 2-3 weeks time.
Study of higher time frame charts suggests that although both indices have crossed their immediate RESISTANCE levels it will be very much difficult for them to cross april 2011 highs and sustain above them.
Instead SENSEX and NIFTY have now entered in a BROAD RANGE BETWEEN 17300-19700 and 5177-5944 and we are going to witness a lot more stock specific moves for a little longer time.
WEEKLY CHARTS OF SENSEX AND NIFTY :
BANK NIFTY :
As one can see on the presented weekly chart of BANK NIFTY it has entered a very BROAD RANGE of just above 10000 to just below 12000 so such a BROAD range will continue to confuse traders and analysts too.
There was a HUGE selling pressure in the second week of BANK NIFTY which took the index down from 12000 to 10000 in just 5 weeks of time but then the low of 10017 has not been broken yet and on the other hand there was a BULL EFFORT in april which could not cross 12000 (which was shown as STRONG RESISTANCE in our april technical views) .
Selling pressure RESUMED in may 2011 but again BANK NIFTY found support at 10317 in the last month and in the last week of BULLISH move again BANK NIFTY has closed smartly up at 11255.
Looks good on weekly chart and a few analysts can argue the PRICE PATTERN as a DOUBLE BOTTOM but we can have confirmation only above 12000+ levels on weekly closing basis.
for the DAY :
And also found support at 18725 as it made a low of 18713 so for today the down side correction may continue ONLY if SENSEX sustains below 18713.
Short term momentum indicators are in highly overbought zone so care should be taken in entering longs but since the MOMENTUM is very high on the upside if any intraday fall remains slow it can be used as short term buying opportunity from supports.
The 200 DAY EMA at 18535 and one IMPORTANT LOW at 18323 are supports for the week.
NIFTY : we had given targets of 5521 and 5605 in our weekly chart book DATED 27TH JUNE 2011 and then during the week we also updated our target at 5700 and on Friday we said that some correction is due from 5716 AND after making a HIGH OF 5706 NIFTY went down.
5560 and 5496 are crucial support for NIFTY now.
And if NIFTY sustains below 5609 one can avoid buying for the day.
As being suggested repeatedly from here if the supposed correction remains slow it will present a good buying opportunity for the short term.
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