WEEKLY TECHNICAL VIEW

TECHNICAL VIEW FOR THE WEEK AHEAD :

SENSEX and NIFTY seems to have entered a phase from where there can be another leg of severe down move may start soon.

Before we discuss technicals on the basis of different time frames it is usual to have a look at what we suggested in our last WEEKLY CHART BOOK dated 26^th September 2011.

“ TECHNICAL VIEW FOR SENSEX & NIFTY FOR THE WEEK STARTING FROM 26-09-2011

As discussed above the markets seems to have ended the corrective rally and are poised to at least 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 NIFTY 4538 and SENSEX 14900 levels as has been being discussed from here.”

On Monday itself SENSEX made a low of 15801 against its august 2011 low of 15765 while NIFTY made a low of 4759 against its resent low of 4720 so as presumed both indices TESTED their august lows and bounced back sharply off lows in first two days.

As expected there was another attempt to hold the bottoms and looking at the week end and especially Fridays movement it clearly seems that the upmove from Monday looks weak.

If the BULLISH GAP between 16209-16282 for SENSEX and between 4878-4905 for NIFTY gets filled up and if both indices closes below these GAP then the recent lows around 15765 and 4720 will be in danger soon.

If this happens watch how our projected supports/target at around 14900-15300 and 4538-4625 works.

For any upside potential for the coming week the 5013-5079 zone for NIFTY and 16756-17000 zone for SENSEX are to be crossed as per us even the opening levels of Friday 4990 and 16599 will also be very difficult hurdles for NIFTY & SENSEX respectively.

As being repeatedly suggested from here SENSEX and NIFTY has to produce three consecutive close above 17300 & 5177 respectively for a change in intermediate trend.

Larsen & toubro played an important role in WEAK rise of indices through the last week, here are two charts of L&T with our comments