TECHNICAL VIEW FOR 20TH APRIL 2012

SENSEX:finally SENSEX has given a close above one of the important resistance level 17436 was a LOW of an earlier BEARISH GAP day so that GAP hurdle was proving as a strong resistance

SENSEX needs to remain above 17436 for one more day at least and it would be a better confirmation of stronger bottom around 17000 if SENSEX closes above 17667

Today being the time of a WEEKLY CLOSE if SENSEX closes above 17667 today it would also be a good weekly close.

NIFTY:5306 was the STRONG RESISTANCE level and today once NIFTY crossed that 5306 level even in intraday corrections it was not going below 5306 as in intraday down moves NIFTY was supported by PHARMA AUTO & FMCG stocks

A strong close above 5338 today will be a good close on weekly basis too.

Our special TECHNICAL COVERAGE of different sectors in January 2012 has been proven very much on track as stocks like TATA MOTORS/RANBAXY/ITC/HUL/DIVIS LAB/DR. REDDYS/VIVIMED LABS etc have remained  very strong PERFORMERS as in that report we clearly said to buy these three sector stocks on every dip.

A weekly close above 5306-5338 will be very good as NIFTY is also forming a BULLISH ENGULFING candle reversal pattern on weekly charts.

A VERY STRONG UP MOVE ON THE CARDS : STOP AT 5226

SENSEX:SENSEX bounced back as EXPECTED but the last hour pull back made the EOD CANDLE with a little longer upper shadow

This is because BANK STOCKS were strong but other few sectors missed out in participation still a better close and we have to keep a STOPLOSS of longs to the CLOSE below the BULLISH GAP of yesterday

A CLOSE above 17436 today would be a very positive development for SENSEX

ONE can see the comparision of PRICE STRUCTURE AND STOCHASTICS ON both SENSEX and NIFTY charts between NOW AND LATE DECEMBER 2011 it shows that a BIG BULL DAY is needed to have a very strong up side

NIFTY:NIFTY FUTURE got resisted at the STRONG RESISTANCE level of 5307 which was for NIFTY INDEX.

Still a good positive close with a BULLISH GAP which is placed in between 5226-5246 so one must keep a STOP at the close below 5226 for longs for next few days.

A CLOSE above EARLIER BEARISH GAP at 5305 will be an important sign of a STRONG TREND REVERSAL

ONE can see the comparision of PRICE STRUCTURE AND STOCHASTICS ON both SENSEX and NIFTY charts between NOW AND LATE DECEMBER 2011 it shows that a BIG BULL DAY is needed to have a very strong up side

WEEKLY CHART BOOK

WEEKLY TECHNICAL VIEW FOR SENSEX & NIFTY for the week starting 2^nd APRIL 2012.

I did not have much to write about SENSEX & NIFTY in my last weekly report BUT the crux was WEAKNESS

Although I wrote very clearly that a CLOSE below 5177 will extend the weakness which luckily did not happen during the whole weak

Till FRIDAY last there was weakness alright BUT SENSEX was somehow not breaching 17003 and NIFTY was not closing below 5171

During the week the LEVEL OF RESISTANCE came down from 5342 to 5312 and then 5242 and on Thursday BOTH SENSEX & NIFTY breached those important supports at 17003 and 5171 but once again both closed just above them.

Adding to this clue I found a very interesting and VERY POSITIVE PRICE PATTERN CALLED “FALLING WEDGE” and in TECHNICAL VIEW for FRIDAY I had said it will be very positive if NIFTY closes above 5220-5242 levels.

Indeed a VERY STRONG CLOSE on Friday CONVERTING THE WEEKLY CHART PATTERN AS A “ LONG LEGGED DOJI “ and maintaining a good BULL CANDLE as on QUARTERLY CHART too.

So WHAT NEXT ?

This is important BREAK OUT of a FALLING WEDGE pattern and this means that the DOWN MOVE from 5499 to 5131 has ended

There is also a very strong possibility that ONE LARGER A-B-C has also ended at 5131 first A leg was 5630-5171 second B was up from 5171-5499 third C was down from 5499-5131

In the NEXT week watch out 5342 and 5460 because if we get a close above these two TARGETS then NIFTY will enter a STRONG BULL PHASE again and will touch 5531-5649 or even higher.

STOP & REVERSE : A CLOSE BELOW 5171.

we use multi time frame charts to analyse markets very frequently and it may seem that ONE DAY BULLISH market has turned views from bearish to bullish very suddenly but the fact is that since last Friday was not only the week end but was the last day of the month & quarter as well so even on weekly chart we have a probable candle reversal pattern called LONG LEGGED DOJI and on QUARTERLY CHART we have a STRONG BULL CANDLE maintained with the 2% rally on last day.