Mastering Stochcharts: WEEKLY TECHNICAL VIEW

In our last WEEKLY CHART BOOK we observed from weekly charts of SENSEX and NIFTY that the up move from lows around 15765 and 4720 respectively DOES NOT look to be very positive .

although from daily charts we suggested yet another attempt to cross 17209 and 5177 on Tuesday and the attempt was made as NIFTY touched 5168 and SENSEX touched 17191 but there was a STAR candle pattern on daily charts on Wednesday which suggested indecisiveness at the RESISTANCE levels.

Do remember that since the rise started in markets from the first week of September 2011 we were very much clear about two things,

1) Any rise should be labeled as a BEAR MARKET corrective rally.

2) NIFTY has to give 3 consecutive closes above 5177 to change the direction.

As NIFTY could not cross 5177 for a single day and SENSEX could not even cross 17209 (which was an earlier high) after the STAR pattern we said this in our daily technical view on Thursday ,

“NIFTY : a high of 5168 and than a STAR candle formation suggests clear indecisiveness for NIFTY .

A close below 5068 with a GAP down open can confirm yet another TOP in NIFTY and than a close below 5019 will also break the support trendline”.

Than came a massive 704 and 209 points crash in SENSEX and NIFTY respectively which put an end to the corrective upside of September.

TECHNICAL VIEW FOR THE WEEK AHEAD :

As discussed above the markets seems to have ended the corrective rally and are poised to ATLEAST test the august bottoms at 15765 and 4720 very soon.

Since we have seen a good bounce from these lows there will be another attempt to hold the bottoms but all will depend upon if we get ANOTHER candle reversal pattern from around 15765 and 4720 levels.

If we don’t get a solid bounce from these levels than we have down side targets of around 4538 and 14900 SENSEX levels as has been being discussed from here.

Important to note here is that two important stocks HDFC and HDFC BANKS had broken down with HUGE VOLUMES on Friday and we clearly mentioned 2 weeks back about our concern regarding a bearish development in LARSEN & TOUBRO chart and Larsen too tanked heavily last week so, three major players of bull market has given EXTREME bearish indications which suggests that barring some corrective rallies we are heading towards ATLEAST 4538 AND 14990 levels for NIFTY and SENSEX respectively.

HDFC DAILY CHART :

HDFC BANK DAILY CHART :

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LARSEN AND TOUBRO MONTHLY CHART :

SENSEX DAILY CHART :

NIFTY DAILY CHART :

As can be seen on this NIFTY chart now onwards NIFTY has two VERY VERY STRONG HURDLES one at 5109 and second is at 5378 both are GAPPED HIGH which have been un filled as on date.

There is another fibonacci magic in place for NIFTY :

As we had shown twice in last three weeks that 4538 is an important Fibonacci support/target level for NIFTY one can see another fibo magic as observed by us on the following NIFTY chart, 4750 and 4500 has become 1.618 and 2.618 retracement levels for one last leg of the corrective upside.