WEEKLY CHART BOOK

TECHNICAL VIEW FOR THE SENSEX & NIFTY for the week ahead and BEYOND FOR 2012:

If one reads the NEWS HEADLINE of the last week one would read analysts world over saying that the markets are in CHAOS

DOW AND S&P BOTH INDICES HAVE GIVEN CLOSE BELOW THEIR RESPECTIVE 200 DAY EMAS,which clearly suggests that the US MARKETS are also entering BEAR MARKET.

Every one knows the situation in EURO ZONE

CHINA has been slowing down and if our ECONOMY does not get a big booster doze soon our markets are not going to attract FOREIGN MONEY at any rapid speed that they were used to.

This is the FUNDAMENTAL PISTURE NOW .

WARNING BELLS were whistled upon a long ago.

First, the present picture of SENSEX AND NIFTY as on charts

There is no BULLISH FOLLOW UP of the previous two weeks HAMMER & DOJI CANDLE PATTERN which is EXTREMELY NEGATIVE ,SENSEX could not breach 16671 and NIFTY faced very strong RESISTANCE in the very much expected way in the zone of 5016-5039.

It seems that the SMALL UP SIDE CORRECTIVE has ended at around 16500 and at 5020 for SENSEX & NIFTY and both indices are going to breach their recent lows very soon and since both indices will breach their 80% retracement levels I believe that the OCTOBER 2011 LOWS will be in danger or will be tested in coming days.

This BEARISH technical view will get NEGATED ONLY IF SENSEX closes a day above 16671 and if NIFTY closes a day above 5039.

NIFTY EOD CHART AS ON O1-O6-2012 :

I am requOting my TECHNICAL COMMENTS on NIFTY and SENSEX which were published in the WEEKLY CHART BOOK of last few weeks and those comments are very much valid from here on as well.

I said this in my WEEKLY CHART BOOK dated 3oth april 2012:

“SENSEX AND 21 PERIOD EMA ON MONTHLY CHART

As shown on the chart the 21 PERIOD EMA has been working well as support & resistance for SENSEX in recent years.

In early 2012 the smart rally took SENSEX to close above the 21 period EMA for two months but as we are heading towards the end of the current month if SENSEX closes below 17364 on Monday it will be back below the EMA.

This suggests that the rally was perhaps a bear market rally only.”

The subsequent move in the month of MAY 2012 proves the point that I made clearly a month back.

MY COMMENTS IN WEEKLY CHART BOOK of 14^th MAY 2012:

“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.”

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 above comments are valid even today as I can not see re emergence of a BULL MARKET in the rest of 2012 we may see some corrective rallies but there will not be a major turnaround

Markets can do anything but if some one carefully follows my technical view even if markets do turn around for the better we will be with it IN TIME.