WEEKLY TECHNICAL VIEW FOR SENSEX & NIFTY FOR THE WEEK
STARTING FROM 14TH OF MAY 2012 :
First let us look at a NIFTY CHART posted in my DAILY TECH
VIEW dated 5th may 2012.
Since last few weeks as our markets went in to a very narrow
range of trading I started to use BOLINGER BAND as an indicator to know exactly
when will we get a DIRECTIONAL MOVE
Also to know the PRECISE DIRECTION when the range BREAK
happens I used ADX and as can be read on above chart I was clear that the down
side momentum was picking up
The RESULT ? a crash up to 4900 against my SECOND TARGET of
4881.
On 5th may and even before that I had said
clearly that BOLINGER BANDS are going to
expand soon and will initiate a DIRECTIONAL MOVE very soon and that is what has
happened.
LEVEL wise 17432 and 17530 for SENSEX and 5306 and 5342 were
clearly suggested as STRONG HURDLES when markets were in a small TRADING RANGE
both SENSEX & NIFTY remained below these level after a few attempt to cross
them
And once supports at 17003 and 5171-5131 were taken out we
have a good trending move for our readers.
WEEKLY AND MONTHLY PICTURE FOR OUR MARKETS :
It looks very dicy as of now when we look at what has
happened in last two weeks and the way the month of MAY 2012 is shaping up.
A sudden turnaround and a NIFTY CLOSE above 5306-5342 can
only change my comments else I can see NIFTY and SENSEX breaking 2011 lows as
well.
After reaching our SECOND TARGET OF 5640 NIFTY started to
correct and in this correction we have just waited and waited to be BULLISH
again and if you study our WEEKLY CHART BOOK since MARCH 2012 we did not say it
is TIME TO BUY ON DIPS except some SELECTIVE STOCKS and except those SELECTIVE
SECTORS like FMCG/AUTO and HEALTHCARE which were identified as BULLISH SECTOR
to out perform the BROADER MARKETS.
Looking at WEEKLY & MONTHLY CHARTS of NIFTY SENSEX and a
large number of LEADING STOCKS I am of the opinion that in next few months even
4538 is in danger.
There is one more possibility in which case 4538 may not get
broken BUT WILL STILL BE TASTED.
We may see a severe down move which will come very much near
4538 and then MARKETS will enter a 3-6 months long CONSOLIDATION PHASE at the
lower range before moving up decisively.
Such a move will be possible even in BANK NIFTY as shown in
this chart
BANK NIFTY MONTHLY 110512:
14600 for SENSEX and 4360 for NIFTY can also be one
important down side target for next few months.
For NIFTY 4233 is one more FIBONACCI LEVEL to be watched as
a TARGET and SUPPORT
Doing a TECHNICAL ANALYSIS of any given market is a
continuous process and I will keep updating future developments as SENSEX/NIFTY
develops new levels or new price patterns.
The above suggested possibilities makes it clear that once again CASH WILL BE THE KING.
Instead of hoping that there will be again a BULL RUN one should liquidate longs and enter back at appropriate lower levels.
Do remember that I had shown the possibility of such bearish trend with corrective rallies till around 2014-2015 quite a few times in the last two years.
The chart posted below is an YEARLY CHART OF SENSEX which was presented in my article SHIFT OF FOCUS 2008-2011 in JANUARY 2012.
My comment on the chart was like this “ AS THE YEAR 2011 FINISHES WITH BIG BEAR CANDLE WE DO NOT EXPECT 2012 TO HAVE A BACK TO BACK BULL CANDLE.
INSTEAD EXPECT CORRECTIVE UPSIDE IN THE MIDDLE OF 2012 BEFORE WE END UP AGAIN WITH NEGATIVE BIAS FOR 2012”
The only change market did was to produce the CORRECTIVE rally in first two months of 2012 instead of in the middle of 2012 as expected.
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