Monday, December 26, 2011


This will be the last WEEKLY TECHNICAL VIEW for the year 2011 and it is with a sad note for the status of the markets for the year.
It will be a monthly  quarterly and also an yearly close at the end of this week.
And on all the above HIGHER TIME FRAME charts it is only BEARS who rules as of now.
All averages are down all indicators are showing weakness to continue just a little positive candle pattern called HAMMER in some good highly traded stocks as on weekly chart  suggests that some stocks may have started to attract some long term funds.
For the next week if NIFTY closes above 4840 and if SENSEX closes above 16133 we can have some hope for the early part of 2012.
Our targets of 15154 and 4538 for SENSEX and NIFTY were hit and we have seen a relief rally which as of now seems to be a corrective rally only.
Since we believe that the price zone of 14600-14900 and 4470-4361 for both index has got some very interesting FIBONACCI ratios present we will have a strong rally from these zone but even 4538 and 15154 has got good Fibonacci supports if NIFTY closes above 4840 we may have already been in for a good rally ahead.
Time to be in buy mode for short term is nearby that is our conclusion for the last week of 2011.
A close below 4630-4599 and NIFTY will have target zone of 4538-4361 again.

A LOOK INTO 2012 :
We will come out with a detailed report for 2012 covering a few sectors and individual stocks but at one glance 2012 seems to be a NON EVENTFULL YEAR as far as the long term picture is concerned.
As described in October 2010 and in January 2011 SENSEX has entered a multi year CONSOLIDATION PHASE which could last till 2015 before finally resuming a GREAT BULL RUN TO EVEN REACH A 50K MARK.
The broader range for the year 2012 can be between 13000-17000 and 4200-5000 for SENSEX and NIFTY respectively.
The whole year could have three legs starting with some bullishness we will see one big crack up to around 14600 in the first few months before we set in a STRONG and LARGER corrective inside the BEARISH C WAVE that we are in.
The final leg could again be bearish to end 2012 on a dismal note again.
We advice readers to follow us with our daily/weekly technical views through the year as the charts unfold the future.
We will be surprised if SENSEX/NIFTY can produce a back to back BULL CANDLE after they are about to finish the year 2011 with a big bear candle.
But markets can do anything so we will track them on day to day basis with an assurance not to let our readers miss out any thing big on either side.

Thursday, December 22, 2011

Weekly Charts Book 19 12 2011

Both indices continued to drift lower and in fact it was a real panic selling which was seen on Friday as both SENSEX and NIFTY hit 28 Month lows.
Technically a close below 4700 for NIFTY and below 15700 for SENSEX is a very bad sign as now on the charts it looks to be a BREAK DOWN although we have to give the Double Bottom probability as if in next one or two days NIFTY again closes back above 4700 there will be some hope.
This view is for Daily Charts but as on Friday the Weekly Chart structure shows no HOPE at all.
Our targets of 4538-4350 for NIFTY and 14900-14600 for SENSEX are now very much on the cards.
Markets can plunge much more than these levels in the current bearish scenario but as we all know CORRECTIONS are always there and as yet we have not seen any SIGNIFICANT correction on MONTHLY BASIS and looking at certain Fibonacci ratios present at 4538/4350 and 15155/14684, we feel a larger corrective rally should begin from the above ZONE OF LEVELS.
We will come out with LEVELS to watch for confirmation of such a rally in due course.
Since October 2010 and more so from January 2011, we have NEVER changed our view that our market is in a STRONG BEAR GRIP and we have never termed any upside rally as a NEW BULL WAVE all such small or larger rally were clearly labeled as a BEAR MARKET rally only and still we have not missed any good and tradable upside moves in the last one year too.
Our first important target for 2011 has been 15000 SENSEX which was presented using various technical tools in January 2011.
Looking at the severe selling pressure seen in the crash of last Friday, it seems that now we are entering a PANIC stage of this 13 month long BEAR MARKET.
The price zone of 4538/4350 for NIFTY and 15155/14684 for SENSEX seems a good support zone and the most noticeable fact is that ALL market participants are now turning to be BEARISH Indian markets at this juncture JUST before we are about to reach our year long down side targets.


We believe that a PANIC LOW IS ON THE CARDS.
There will be a REASON coming soon; an event which wills TRIGGER FEAR and one bottom will get hit soon.
As we look at the following Weekly Chart of broader market index S&P CNX 500, we can feel the real heat of the situation which is entering a PANIC ZONE.
This index is at 3647 and important support is seen only around 3500 that is still a fair distance away.

I was almost alone when I said in a very detailed article with number of LOGICAL TECHNICAL REASONIG that A MAJOR TOP IS NEAR BY on 12th October 2010 there were very few who even tried to believe or digest my view and now even the RESERVE BANK GOVERNOR is admitting that the economy is SLOWING DOWN .
MARKET knew very early that the economy will slow down or that there will be a crisis in the EUROZONE or that INDIAN RUPEE will tumble to all time low or about the HIGH INTEREST RATE REGIME or any other fundamental reason that almost everyone is aware of NOW.
And TECHNICALS is the best tool to know what market is trying to say.
Our experience suggest that its time of bargain hunt when authorities do admit about economic slowdown but A PANIC LOW is required here in the target zone of 4538-4350.
What we are trying to suggest here is NOT that we are going to hit a MAJOR BOTTOM for sure but at least an intermediate bottom should be coming soon and the possible up move will be corrective only but may be larger than earlier correctives.
If you look at the Monthly Charts it is a clear down move without any SIGNIFICANT correction so we expect a corrective up move which will be a LOWER TOP formation on Monthly Charts.
BUT WHY 4538 ?
1.27% (4514) and 1.618% (4355) are Fibonacci retracement of the last leg of up move from 4639 to 5099. Watch NIFTY charts of August presented here.



We derived at 4538 as an important destination for NIFTY almost four months back and one RECENT corrective rally in NIFTY from 4639 to 5099 also suggests at 4514 as we use a particular Fibonacci ratio for this rally that is what & why we call it a FIBONACCI MAGIC.

Market rebounds as Moody's raises India's local-currency debt rating to investment grade
Key benchmark indices surged to attain their highest closing level in nearly one week after Moody's Investors Service today, 21 December 2011, raised India's local-currency debt rating by one level to investment grade from the highest junk grade. Higher global stocks also aided rally in battered Indian shares. Comments by a senior government official that the government is looking at all options to attract foreign capital inflows also helped lift investor sentiments as the Sensex snapped a five-day losing streak. The market breadth was strong. The BSE Sensex jumped 510.13 points or 3.36%, up about 310 points from the day's low and off close to 40 points from the day's high. Exporters and resource firms led world stocks higher as renewed optimism about the health of the global economy boosted risk appetite.
The BSE Sensex jumped 510.13 points or 3.36% to settle at 15,685.21, its highest closing level since 15 December 2011. The index jumped 552.23 points at the day's high of 15,727.31 in late trade. The index rose 201.96 points at the day's low of 15,377.04 in early afternoon trade.
The S&P CNX Nifty jumped 148.95 points or 3.28% to settle at 4,693.15, its highest closing level since 15 December 2011. The Nifty hit a high of 4,707.35 and a low of 4,601.95 in intraday trade.
The BSE Mid-Cap index gained 1.29% and the BSE Small-Cap index rose 0.94%. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 1924 crore, higher than Rs 1908 crore on Tuesday, 20 December 2011.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,672 shares advanced and 1,097 shares declined. A total of 104 shares were unchanged.
SENSEX : as expected SENSEX rebound strongly from support levels as NIFTY reached a precise target.
We suggested a strong bounce back from these levels long back.
EXTREME oversold condition of MOMENTUM indicators can be one reason for such a bounce back.
SENSEX has closed above 15478 in a strong manner and so it has entered well into the RESISTANCE ZONE which is a first good sign we expect SENSEX TO REACH 16133/16193 in this leg first.
We will watch the WEEKLY CLOSE and will try and find out next target levels.

NIFTY : NIFTY bounced back almost 170 points from our target of 4538 which is clearly a very strong move.
We have been saying that the bounce back from 4538 will come from COMPLETE NON BELIEF.
NIFTY has closed at another precise level which we discussed yesterday at 4693.
Although the good indication came from FUTURE NIFTY as it has closed at 4722 which suggests that it should be a BUY ON DIPS on intraday corrections for up side targets of 4779 and 4839/4861.
Caution is advised if NIFTY closes below 4599.