WEEKLY CHART BOOK 300112

TECHNICAL VIEW FOR SENSEX & NIFTY FOR THE WEEK STARTING FROM 30-01-2012

NEW POSSIBILITIES OPENS UP FOR INDIAN STOCK MARKET

The up move in the Month of JANUARY 2012 has arrived from a real DISBELIEF as clearly suggested in my recent Months TECHNICAL VIEWS.

We were expecting a decent rally from around 4538-4350 NIFTY LEVELS and from 15155-14600 SENSEX levels while for METALS we were expecting a good corrective rally from the month of January 2012.

The rally has come but its magnitude and the LEVEL OF PARTICIPATION makes me think of new possibilities for the future.

Let us first have a look at the PROJECTED move of SENSEX for 2011 and beyond as per the chart which presented ON 12^TH OCTOBER 2010.

BSE SENSEX QUARTERLY CHART AS ON 08/10/2010

SENSEX did tank a heavily by more than 30% in 2011 but the fall unfolded as a Channel Move.

Our first target was 15000 and SENSEX made a low of 15135.Interestingly there was a classic Fibonacci magic at 15150 and for NIFTY that level was 4538 so both indices touched those year long targets and bounced back sharply.

We expect our markets to be in CONSOLIDATION PHASE for a few years starting 2008 and the move is EXPECTED to unfold as an A-B-C-D-E TRIANGULAR PATTERN.

We suggested a LARGER “C” WAVE to unfold as a part of the above mentioned pattern.

CRUCIAL QUESTION IS “Is the SUPPOSED “C” WAVE COMPLETED ?”

The answer may be yes.

There are two possibilities

First is that the LARGE “C” WAVE may have ended

Two we are seeing a bigger correction of the first leg of the “C” WAVE.

In both cases we believe that there will be an up move up to 5649 for NIFTY and 18829 for SENSEX in a better case even an up move up to 5947 and 19808 too can be possible for NIFTY and SENSEX respectively.

We had repeatedly been saying that the 2011 crash would not be like 2008 and as we described an important difference between the two crash in our Report “SHIFT OF FOCUS 2008-2011”.The 2011 move has no impact on certain sectors so if the LARGER C WAVE has completed than we have a great buying opportunity in those sectors because certain sector/stocks which have had minimum impact of fall in 2011 are bound to scale new highs very soon.

About the suggested LARGER CORRECTIVE RALLY we mentioned in our TECHNICAL VIEW DATED 28^TH NOVEMBER 2011

“We will have one very big up move in 2012 from this zone and there will be a STRONG REASON of very severe panic while it could be a POLITICAL CRISIS in our country or a bad news from EUROPE but we will have one panic bottom in a few Months time. We have seen corrections on Daily & Weekly Charts and we will now see a correction on Monthly Charts and I am not saying that one should start buying from tomorrow but do remember that NEXT PANIC BOTTOM will provide a good buying opportunity for investors / traders alike. Also a bottom will form in the ENVIRONMENT OF COMPLETE DISBELIEF as none believed our argument about a major top in October 2010 and in January 2011

We also said in this article that SENSEX/NIFTY will form DOUBLE CANDLESTICK PATTERNS ON MONTHLY CHART as they hit bottom.

As on 27^th January both SENSEX & NIFTY are about to complete a “DOUBLE CANDLE REVERSAL “ PATTERN on Monthly Charts as suggested two months back and that is one of the main reasons for us to believe that the worst could be over for INDIAN markets.

BSE SENSEX MONTHY CHART

For short & medium term it is definitely a TIME TO GO LONG on selective stocks.

For SENSEX and NIFTY minimum targets should be around 61.8% retracement of the entire fall of 2011.

Indices may even reach up to 80% levels.

A FEW REASONS to believe this.

1) Fibonacci ratios present at 4538

2) The fall is a CHANNELED move

3) Oversold STOCHASTIC on QUARTERLY chart.

We would like to deviate from our earlier view about SENSEX/NIFTY up move to remain only CORRECTIVE but it can be a new BULL WAVE TOO and we will take a call at higher levels only.

OUR TECHNICAL VIEWS ON OTHER INDICES & STOCKS

Besides projecting a very big up move for Indian markets through our last two Month Technical Views, we projected a very big up move for SBI looking at its BROADENING price structure here are two charts of SBI before and after the projected move came

BSE METAL INDEX

OUR EARLIER COMMENTS

BSE Metal Index seems to be in formation of "the broadening pattern" so the down move which has started from 12275 recently has all possibility to touch the lower end of trend line around where some supports lie in form of 61.8 % Fibonacci retracement & earlier low @ 9504.

Some bounce back is expected due to highly oversold position on Daily Charts & support @ 10280 but all possibilities of cracking down to 9600-9500 levels.

OUR PRESENT VIEW ON BSE METAL INDEX

The suggested "Broadening” structure has given a good break out.

Metals are a clear buy on dips and no more sell on exit at election gap and at 61.8% BSE Metal Index may have hit a very significant bottom.

BSE METAL INDEX WEEKLY CHARTS

A FEW WORDS FROM MY ARTICLE DATED 19/12/2011

TECHNICAL VIEW FOR SENSEX & NIFTY FOR THE WEEK STARTING FROM 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.

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.

NIFTY FUT MADE A LOW OF 4538 AND TODAY IT TOUCHED 5149.

WEEKLY CHART BOOK 23/01/2012

TECHNICAL VIEW FOR SENSEX & NIFTY FOR THE WEEK STARTING FROM 23-01-2012

WHAT HAVE WE BEEN SAYING SINCE LAST 1-2 MONTHS??

We were the first to say that from around 4538 we will have a SIGNIFICANT bounce in our stock markets.

We were clear in our view that the bounce will come off from complete NON BELIEF.

If someone noticed the media reports in the Month of December 2011, everyone was saying that The Indian Market is in firm BEAR GRIP while we mentioned that 4538 is the TARGET and a strong support level. NIFTY moved exactly as per our expectation as NIFTY FUTURE touched an exact level of 4538 and yesterday it touched 5065 which was our third upside target as well.

ON 11^TH January we posted this chart with our Daily Technical View the comment on the chart of NIFTY was very categorical which suggested up side targets for NIFTY as 4965 and 5067 on that day NIFTY was at 4860 so we had given a clear direction which was having an upside of 200 NIFTY POINTS.

Having reached their respective 61.8% Fibonacci Retracement levels, both SENSEX and NIFTY had formed a probable reversal pattern called A DOJI STAR in the Daily Chart and we expect one down side correction starting any day next week.

SENSEX and NIFTY both have generated a very good up move and this up move can be FIRST LEG of a larger up side correction that we have been anticipating for the year 2012.

BUT all depends upon the upcoming correction if the correction remains slow and SENSEX and NIFTY complete a strong higher bottom this rally can go much higher.

We believe that next one or two weeks will decide if we have already hit one significant bottom or not.

In the next week we need some confirmation first that this up move has actually ended because if SENSEX and NIFTY continues their up move NIFTY can still reach around 5126-5157 and SENSEX can reach around 17003.

The up move will end if we get a BIG BEAR CANDLE below the STEEP TRENDLINE and if BULLISH GAPS get filled in.

Even then the levels around 4873 is going to play a crucial supportive role so there is no conclusion yet if SENSEX and NIFTY has already hit a MAJOR BOTTOM or not and we will wait for certain evidence to confirm it.

BSE METAL INDEX

I would like to re publish one chart of BSE METAL INDEX with a note that in our WEEKLY CHART BOOK dated 26^th December, 2011 as we suggested an up move in BSE METAL INDEX and in addition to that if one reads our comments on this re produced chart of BSE METAL INDEX dated 25^th NOVEMBER 2011 one would realize that we have not missed any big move even in this index.

A very smart 1600 point up move in BSE METAL INDEX and this up move was predicted for the January month in specific well in advance.

BANK NIFTY

BANK NIFTY has completed one major down move and BANKING STOCKS will lead the new up move which will be a SIGNIFICANT correction on the upside and has started to unfold.

As on the EOD charts the recent up move DOES NOT LOOK TO BE CORRECTIVE ANY MORE.

So we strongly recommend buying BANK STOCKS in any correction that comes up in coming days.

WEEKLY CHART BOOK : CHARTS ONLY

WEEKLY CHART BOOK

WEEKLY TECHNICAL VIEW FOR SENSEX & NIFTY FOR THE WEEK STARTING FROM 15^TH JANUARY 2012:

For the first time in last 8-10 months the BROADER MARKET has started to show some signs of BULL ACTIVITY.

SENSEX & NIFTY are yet to reflect this because there has been a mixed bag inside these two indices.

Both SENSEX & NIFTY has reached 38.2% retracement levels and there are signs of a correction coming up.

There is a clear WEDGE developing as shown on this SENSEX chart and short term future will be decided on a BREAK OF IT ON EITHER SIDE IN THE NEXT FEW DAYS.

Looking at the strength in certain HIGH BETA stocks and even certain sectors like BSE REALITY AND BSE METAL INDEX we repeat that if SENSEX & NIFTY ENTERS a correction from here we will have a great buying opportunity coming up for 2012.

We believe that in 2012 atleast for once SENSEX AND NIFTY WILL BREAK their downward channel on the up side which will be a LARGER B WAVE INSIDE the  current C WAVE.

BSE SENSEX WEDGE :

Stocks like a JSW STEEL  AN AXIS BANK,A TATA STEEL OR A RANBAXY will be giving a great opportunity if SENSEX and NIFTY enters another corrective or down move.

The recent uptrend will continue towards 50% and 61.8% retracement levels if SENSEX closes a day above 16421 and if NIFTY closes a day above 4921 in the next week.

While for the downside correction NIFTY MUST CLOSE BELOW 4782 and SENSEX must close below 15664.

If we get a WEEKLY CLOSE below 4686 and below 15664 for NIFTY & SENSEX respectively than we shall have to wait for buying opportunity at lower levels which could be perhaps below 4538 and below 15135 only.

AN important STRUCTURE DEVELOPMENT is in progress on weekly chart of NIFTY which is A FALLING WEDGE and it now surely seems that one VERY GOOD BOTTOM has either been hit or is very much near by.

We maintain our view that if SENSEX will breach 15135 in near future the price zone of 14900-14600 WILL produce a very significant rally in 2012.

2008-2011 : SHIFT OF FOCUS & LONG TERM TECHNICAL VIEW FOR INDIAN MARKETS

2008 AND 2011 MARKET CRASH :

A COMPARISION IN SECTORIAL INDICES ,A SHIFT OF FOCUS :

In our TECHNICAL VIEWS presented since October 2010 we had pointed out a few important things about future of our markets for the long run.

(A)  Our markets have entered a LONG TERM consolidation phase.

(B)  We had labelled the 2008 crash as an “A” wave and 2009-2010 BULL RUN as a “B” wave in Elliott terms and it was one of our prime TECHNICAL LOGIC for finding out a very important TOP at least a month in advance before an actual TOP was in place on 5^th November 2010.

We expected a LARGER “C” wave to unfold and that is what we are in as we have seen a 25% down move from NIFTY point of view.

(C)  We also clearly said that the coming “C” wave will be different from the 2008 CRASH.

Here comes an Important Development as far as long term picture of our markets is concerned.

We had THREE severe months of crash in 2008 and in those three months almost no stock was spared these months were January, June and October but certain sectorial stocks bounced back very sharply digesting such massive sell off in 2008 and even made new highs in 2010 so these sector stocks are going to rule the Indian markets in the long term.

SENSEX YEARLY CHART

SENSEX  MONTHLY CHART :

(D) We had maintained and we repeat that SENSEX & NIFTY are in long term BULL RUN and we have just entered a LONG TERM accumulation phase after a MASSIVE BULL RUN started from 2003 to 2008.

After this phase of CONSOLIDATION ENDS, SENSEX will EXPLODE and will even reach 50000 marks.

Here comes an important question WHICH SECTOR will lead such a massive BULL RUN ?

We track SENSEX & NIFTY only for short/medium term view on the markets in general but a detailed study of all SECTOR INDEX charts reveal that INDIAN MARKET has been going through a great SHIFT OF FOCUS from the bigger & long term players’ point of view.

This long term money is least concerned with anything in the World Market but is focused on the intact long term India growth story.

This detailed study clearly reveals that TECHNICALS can understand such a long term shift of focus as well.

THE OUT PERFORMERS :

In the charts attached here, one can see that FOUR SECTORS completely underperformed the SENSEX & NIFTY for a significantly long period of time in the massive BULL RUN of 2006-2008. These were AUTO, IT, FMCG and HEALTH.

But all these sectors out performed broader markets in 2009-2010 BULL RUN and in fact out of these four sectors BSE AUTO topped out in 2006, BSE IT topped out in 2007 and BSE HEALTH & FMCG completed a DOUBLE TOP in 2008 so after topping out very early before 2008 these FOUR sectors COMPLETED a larger correction in 2008 and started NEW MEGA BULL RUN which promises to go far away from here.

Simple reason for such EXPECTATION is that all these FOUR sectors are now out performing broader markets by huge margin through this 2011 crash.

We suggest one goes through our comments on all these charts of different sectors.

BSE FMCG MONTHLY CHART 2003-2011 :

Looking at broader market condition and possible PROLONGED accumulation phase in addition to a huge BULL RUN since last three year, this sector may enter a CORRECTIVE PHASE which will be giving us very good buying opportunities in panic during 2012 as we expect a pause in up move for some time.

ITC,HINDUNILEVER,DABUR,MARICO,COLGATE PALMOLIVE ARE THE TOP PICKS IN FMCG SECTOR.

BSE AUTO MONTHLY CHART 2005-2011:

This sector will also be A BUY ON DIPS for 2012 as it has clearly out performed SENSEX & NIFTY by a good margin in the last up move and also in recent 2011 crash.

There are two distinct possibilities that one will be a BREAK OUT of WEDGE PATTERN (can also be called a FLAG) or a down move up to around 6000 but in both cases this sector will give us a very good long term buying opportunity in 2012.

TATAMOTORS,M&M,HERO HONDA,TVS MOTORS,BAJAJ-AUTO & MARUTI ARE THE TOP PICKS IN AUTO SECTOR.

BSE IT MONTHLY CHART 2003-2011:

As clear on the following chart IT STOCKS initiated the MEGA BULL RUN way back in 2003 but were topped out one year early in 2007 and again out performed SENSEX buy crossing previous high with a significant margin so this sector will also not likely to breach 2008 lows and will give a good buy side opportunity later in 2012-2013.

Although BSE IT has outperformed SENSEX till date in 2011 its price pattern does not promise an immediate up side so we will have to wait for a better entry point during the coming months.

INFOSYS,TCS,WIPRO & HCL TECH ARE THE TOP PICKS IN IT SECTOR.

BSE HEALTH CARE MONTHLY CHART 2001-2011:

BSE HEALTH CARE INDEX also started a BULL RUN in 2003 but was a clear defensive SECTOR only till 2007 this sector too went in to deep red during 2008 but it did not remain a steady performer any more from 2009 and reached life time highs in 2010.

So it has also out performed SENSEX in recent crash and now it is showing signs of having entered a CORRECTIVE PHASE which should be an ACCUMULATION instead of distribution phase.

BUY ON DIPS would be a good suggestion for Pharma sector stocks in 2012 for a GREAT BULL RUN ahead.

CIPLA, DIVISLAB, SUN PHARMA, DR REDDY, RANBAXY ARE THE TOP PICKS IN HEALTH-CARE SECTOR.

THE LEGGARDS :

Here are other SECTOR CHARTS which were outright winners till 2008 BUT the SELL OFF in 2008 was so heavy that they underperformed SENSEX & NIFTY in 2009-2010 BULL RUN.

As can be seen on charts these sectors completed LOWER TOPS against their respective TOPS of 2008 and so these SECTORS are the WORST HIT in 2011 crash.

These SECTOR STOCKS are likely to remain under selling pressure through next one /two years and some of them are likely to even breach their respective 2008 lows.

These sectors are BSE CAPITAL GOODS, BSE METAL, BSE REALITY AND BSE OIL&GAS.

It is here by clearly understood how the LONG TERM CAPITAL has gone out of the LEGGARDS and has been slowly being invested in the WINNERS.

BSE CAPITAL GOODS MONTHLY CHART 2003-2011:

A chart in picture form can tell a story far better than if described in words.

The following chart clearly does the same.

A clear under performer in 2009-2010 BULL RUN and so the worst hit sector in 2011 BSE CGS INDEX is likely to suffer most for next few months and we believe that these sector stocks may even breach 2008 lows.

 It is here by clearly understood how the LONG TERM CAPITAL has gone out of the LEGGARDS and has been slowly being invested in the WINNERS.

BSE CAPITAL GOODS MONTHLY CHART 2003-2011:

A chart in picture form can tell a story far better than if described in words.

The following chart clearly does the same.

A clear under performer in 2009-2010 BULL RUN and so the worst hit sector in 2011 BSE CGS INDEX is likely to suffer most for next few months and we believe that these sector stocks may even breach 2008 lows.

 BSE REALITY MONTHLY CHART 2007-2011:

This particular sector was probably worst hit in 2008 and the worst performer in 2009-2010 rise and so was worst hit in 2011 as well.

We first pointed out at the ugly WEAKNESS in reality sector just before the LIC HOUSING SCAM came out in October 2010 till that date almost no stock could perform well through 2011 except LIC H FINANCE itself.

Just a sheer valuation can attract buying in this sector in 2012 BUT we will have to choose the out performing stocks out of the sector in a very very selective manner.

Do remember that such low valuation can generate huge returns over long term but finding out specific better stocks remains a challenge too.

BSE METAL INDEX MONTHLY CHART 2005-2011:

We suggested about a TRIANGLE PATTERN in BSE METAL in early January 2011 and when the TRIANGLE was broken on the down side we advised every one to exit metal stocks.

BSE METAL index almost captured the lost ground of 2008 in the BULL RUN of 2009-2010 but than this triangle distribution made it a weak performer.

This FOUR YEAR long move which includes two down and one up move can be a part of a LARGER MULTI YEAR LONG TRIANGLE but if 2010 high was a lower TOP bse metal can breach 2008 lows as well.

EXIT on rallies will be our advice for BSE METAL in 2012.

BSE OIL & GAS MONTHLY 2005 -2011 :

RELIANCE leads this pack of sector index and this sector also under performed SENSEX in 2009-2010 so it has seen heavy sell off lately in 2011.

For the year 2012 this sector will also likely to underperform the broader market and we advise an EXIT on rallies for the sector.

Another interesting SECTOR for long term investor can be BSE CONSUMER DURABLES the rise from 2003 to 2008 was very strong but as the fall in 2008 was also very severe so this index followed SENSEX in 2009-2010 and it could not cross 2008 highs but interestingly its fall in 2011 is not as severe as of the BROADER MARKET.

Lately there is some selling pressure in stocks of BSE CDS too but we believe that this index will also not breach 2008 lows and will pose greater buying opportunity when the index comes to around 4000 levels.

Stocks to watch at this level are

Bata and titan.

CNX BANK NIFTY MONTHLY CHART 2000-2011:

Since STOCK MARKET is finance straight away the BANKING SECTOR always remain the most SENSITIVE sector.

CNX BANK NIFTY was moving along with SENSEX till 2008 crash but in the BULL RUN of 2009-2010 this sector overtook SENSEX by a broad margin.

That is why the CNX BANK NIFTY does not look to have suffered much at a first glance but in reality banking stocks are also worst hit in 2011 crash.

We do not expect the CNX BANK NIFTY to breach 2008 lows but we neither expect CNX BANK NIFTY to out perform SENSEX & NIFTY in next one or two years.