WEEKLY TECH VIEW

WEEKLY TECHNICAL VIEW FOR THE WEEK STARTING FROM 05-09-2011 :

At the beginning of the last week it self we had projected a CORRECTIVE RALLY for the markets from oversold status of most of the MOMENTUM INDICATORS on weekly basis.

We put forward an observation that if BROKEN LEVELS are recaptured soon we can have a rally and level wise we said this

“Since on last Friday we have already seen a SENSEX low of 15765 we believe that we have achieved one important bearish target and the big question will be NOW WHAT ???

AS on Friday 26^th august SENSEX has given a close below 38.2% retracement level which 15990 so for the next week we have to look if SENSEX can give a close above 15990 as a SHORT TERM positive clue.

For NIFTY this level is 4777-4796 so for NIFTY we have to look for a close above 4796 in coming week for any positive upside.

But the real good upside will be possible ONLY if SENSEX can close above 16213 and if NIFTY can close above 4965 ESPECIALLY on a weekly closing basis. “

In the followed up DAILY TECHNICAL VIEWS  later in the week after NIFTY and SENSEX closed above first level of resistance on Monday we had given targets of up to 38.2% retracement levels for SENSEX the target was 16973 and for NIFTY the target was 5096 both indices got resisted after hitting their targets respectively as these levels were described as important RESISTANCE LEVELS TOO.

This upside rally of three working days looks CORRECTIVE but many sectorial indices including NIFTY and SENSEX have completed a good BULLISH CANDLE REVERSAL PATTERNS ON WEEKLY CHARTS.

We are clear in our opinion that after such massive scale sell off which we have seen in the month of august markets can not make any SIGNIFICANT BOTTOM in a short span of a week.

We will have two options :

SENSEX AND NIFTY will make a higher bottom above their most recent lows of 15765 and 4720 respectively and we will see ANOTHER BULLISH CANDLE REVERSAL pattern on weekly charts

Or

SENSEX and NIFTY will go a shade below their recent lows (remember that we had already suggested very high chances of A SIGNIFICANT rally from around 15300-4538 levels) momentum indicators will have POSITIVE DIVERGANCE ON DAILY CHARTS  and then markets can have one significant up side rally.

In the second option too SENSEX and NIFTY will make another CANDLE REVERSAL PATTERN on weekly charts.

It is clear in both possibilities that we will see ATLEAST one more down side leg in coming days BUT already there is some real buying interest being seen in SELECTIVE stocks like reliance which suggests that we should take care in shorts for some time now.