A FEW CHARTS

WEEKLY CHART BOOK

TECHNICAL VIEW FOR SENSEX AND NIFTY FOR THE WEEK STARTING FROM 13^TH FEBRUARY 2012:

After five weeks of run away up move both SENSEX and NIFTY have started to show some EXHAUSTION at higher levels

Both indices has developed a WEEKLY candle which is called as a DOJI STAR and this candle is a probable REVERSAL PATTERN but looking at the STRENGTH of the recent BULL RUN we don’t expect a larger fall from here but there can be a range bound corrective after an initial leg of a little severe crash.

This corrective should consume more time instead of damaging prices.

17980 and 5454 are the nearest strong RESISTANCE levels so atleast a HALT will be welcome.

On Thursday last BOTH SENSEX and NIFTY gave a BREAK above their small trading range where their was a euphoric up move as if the MISSED OUT trader too rushed to buy but on Friday the short term range break out proved a FALSE break AS SENSEX and NIFTY came down sharply and entered back in to the range.

For NIFTY 5156-5177 was very tough resistance zone and the FIRST IMPORTANT SIGN of a good TREND REVERSAL is when PRICE IGNORES such resistance zone.

NIFTY did the same as it gave a very brief correction from around 5200 and then completely IGNORED the resistance zone.

We had given a NIFTY target of 5435 in JANUARY and in the last week NIFTY touched 5427 reaching the target.

BULL MARKET WITH ROCK SOLID HORSE POWER

WAITING FOR A CORRECTION

IT IS A ROARING BULL MARKET.

As per my understanding of TECHNICAL ANALYSIS, the last five weeks run away move can’t be a SIMPLE CORRECTIVE RALLY but it is THE FIRST LEG OF A NEW BULL WAVE and such a move is visible in so many numbers of stocks that one can’t ignore such participation.

There are instances in the past that even BEAR MARKET rallies can be very sharp but in our case the recent rally has been witnessing very good participation in most of the sectors also there are quite a few sectors which were unaffected by 2011 crash and in addition to that the CHANNELED MOVE IN SENSEX AND NIFTY is one more technical evident that our market have finished the LARGER “C” WAVE and so a SIGNIFICANT BOTTOM is in place at 4538.

WHAT LIES AHEAD IN THE SHORT TERM ?

As we had already given NIFTY targets of up to 5900 so the direction is clear but a rally without any correction VISIBLE ON EOD CHART is dangerous.

For an INVESTOR it is a party time for 2012 and beyond but for a TRADER caution is advised.

Those who are left out till recently in this rally will want to join the bandwagon and for them an SBI was costly at 1600 but they will now find it cheap at 2100 that is just how perceptions gets changed as TREND GETS CHANGED.

We will be very SELECTIVE in our stock picking for both an investor and a trader but ONE FALL will again surprise the late entrants in this rally.

NIFTY and SENSEX will make a HIGHER BOTTOM in coming days but we are not sure till what level the correction will come unless we see a clear TOP.

So for the short term we must let the market to unfold any short term TOPPING PATTERN and at this juncture only SELECTIVE buying is advised.

ARE WE ON TRACK ?

We are very happy that we were amongst very few to have predicted A TOP IN OCTOBER 2010 RIGHT AT THE TOP and now we were first to have predicted a significant and VERY PRECISE BOTTOM way in advance before it was hit as 4538 should be a history now.

People use various techniques to predict major turning points in market and OBSERVATION of market behaviour in a Specific Month for Years is helpful and as per that Month of JANUARY has been a BEARISH MONTH for so many years.

This particular observation kept most of the analyst in dark during the recent rally while we used our own techniques and we were able to predict such a MASSIVE BULL RUN very well and way in advance.

We were of the clear opinion that from 4538-4360, there will be ONE BIG RALLY. We believed that the rally will be corrective but looking at the STRENGTH somehow we were able to confirm a NEW BULL WAVE very quickly.

This was the first rally since January 2011 during which we never said to SELL ON RISE even once.

 If one studies our INTRADAY/POSITIONAL TRADING CALLS during market time, there were hardly any SHORTING CALLS during last three weeks and that is critical to understand what we believe about the underlying TREND. Also we continued to upgrade our NIFTY targets with adequate protection STOP LEVELS and the last target was 5326 which was achieved on 3^rd February.

For the next week SENSEX has supports at 17003 and 16828 and for NIFTY 5099 and 5076 are two important supports.

5399 - 5496 is the strong resistance zone for NIFTY and 17908-18326 is the ZONE OF RESISTANCE for SENSEX.