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 12TH 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 28TH 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 27th 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 & STOCKSBesides 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