WEEKLY TECHNI VIEW

WEEKLY TECHNICAL VIEW FOR THE STARTING FROM 08-08-2011 :

In our weekly chart book dated 25^th july 2011 we categorically said this “ The broad range for SENSEX IS in between 19811 and 17295 and for NIFTY in between 5944 and 5177.

Both indices has tested their respective January-2011 bottom on 20^th june 2011 the important question arises is weather at june 2011 lows SENSEX AND NIFTY has ended the large correction started from late 2010 or not.

The answer is difficult but most probably they have not yet finished the larger corrective.

There is infact still a DISTINCT possibility that both indices will start another leg of deep correction from around 5750/19200 or maximum from around 5944/19811 respectively.

SENSEX and NIFTY should again re visit 17300 and 5177 respectively OR may make a HIGHER BOTTOM against 17300-5177.

If these levels are broken SENSEX and NIFTY will open up down side targets of 16200 and 4848.”

After this clear warning of a DISTINCT POSSIBILTY OF A DEEP CORRECTION NIFTY made a high of around 5700 and SENSEX made a high of 18944 and started a REAL DEEP correction which breached the earlier lows and closed the week almost at the support.

We had earlier said about the DIECY STAGE of world markets just before the BIG plunge came in the world markets.

WHAT NEXT  ?

SENSEX made a panic low at 16990 and NIFTY made a low at 5116 both were below their important support levels but both indices managed to close around supports.

But the HUGE GAP area is now a very difficult RESISTANCE for both SENSEX and NIFTY.

So TECHNICALLY any up move up to 5434 and 18032 should be considered as selling opportunities for the FIRST down side targets of 16200 and 4848 .

As STRUCTURE WISE the whole phase of CORRECTIVE bounce backs from February 2011 looks to be only a phase of distribution on weekly charts and the RECTANGLE CORRECTIVE PATTERNS on weekly charts of BSE CAPITAL GOODS AND BSE BANKEX coupled with a LARGE TRIANGLE BREAKDOWN ON METAL INDEX and a TOP HEAD&SHOULDER PATTERN on BSE IT INDEX clearly points out at a lot more panic to come in our markets BEFORE our markets starts to deviate from the world markets for BETTER.

This FRESH down move is not surprising for us NOR should it be surprising for our readers.

 the RISE OF INFLATION the HIKE IN INTEREST RATES and now the RATING DOWNGRADE OF USA are the developments  which are considered NOW as the REASONS for the huge crash happening in equity markets BUT technically the STRONG BEARISH picture for the year 2011 was drawn by us way back in January 2011 and even in October 2010 and in November 2010 we were among the first to SUGGEST that a MAJOR TOP is in place for our markets.

When we said on 25^th july that another leg of downtrend will open there were no IFS AND BUTS in the statement.

We had given the 5700-5900  zone as a strong hurdle and 5496 as a TREND DECIDER LEVEL in our daily and weekly technical views in last two months and in the following chart one can see how correct these levels were.