WEEKLY CHART BOOK

WEEKLY TECHNICAL ANALYSIS OF SENSEX & NIFTY:

For SENSEX my critical RESISTANCE LEVEL was 17120 and I had drawn a clean RESISTANCE ZONE on SENSEX chart A MONTH BACK and after initial struggle SENSEX opened with a BULLISH GAP exactly at this level as one can see this chart.

There were some bad news from RBI as there was no RATE CUT there was some real fear about the FINANCIALS OF EUROPE but despite all this SENSEX & NIFTY did not breach certain KEY SUPPORT levels

Then there was a chart pattern called A “ DIAMOND” , for a TECHNICAL ANALYST patience is the key as at times markets does not give a very clear clue but gives some HINTS only so I advised to wait for the BREAK OFF the DIAMOND pattern BUT bias WAS positive AND positive hint also came from RISING ADX and nearly oversold STOCHASTIC on EOD CHARTS.

So these few were positive HINTS markets passed on to us.

Another positive was the developing price pattern on MONTHLY CHARTS of both SENSEX and NIFTY which was described almost 15 days back and infact because of the huge surge on the last day of the MONTH the pattern which was TO BE A “PIERCING LINE” turned out to be a “ BULLISH ENGULFING”which is more positive for our markets.

SENSEX MONTHLY 290612:

Here is how this Japanese candle stick chart pattern is described in books on the subject:

Definition of 'Bullish Engulfing Pattern'

A chart pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses or "engulfs" the previous day's candlestick. The shadows or tails of the small candlestick are short, which enables the body of the large candlestick to cover the entire candlestick from the previous day.

In our case it is MONTHLY CHART of SENSEX instead of the DAILY CHART as described above.

 

Also I expected a BIG CANDLE to come up soon and once NIFTY opened with a GAP above 5159 there was no look back for the day

So now onwards it will be A BUY ON DIPS as one by one all TIMEFRAME CHARTS are turning up.

16800-16653 for SENSEX and 5093-5041 for NIFTY are our new STOP & REVERSE on closing basis.

Here is a CHART of NIFTY which was posted in one of my earlier TECH VIEW just a few days back where I had given NIFTY TARGETS of up to 5442 if 5020 is held

One BIG BULLISH CANDLE was needed and both SENSEX and NIFTY ended the last WEEK & MONTH with a big BULLISH CANDLE as a break not only above the important RESISTANCES but also as a break off the DIAMOND pattern on daily charts.

For SENSEX TARGETS UPTO 19805 are possible even if the whole phase from OCTOBER 2011 is corrective in nature

For NIFTY the first TARGET ZONE is 5419-5499 next will be 5640 but a move up to 5900 is also possible.

So ideally we would see some sort of SMALL down side move only to be bought aggressively.

This SENSEX chart speaks it all

SENSEX WEEKLY TARGETS 290612:

The RESENT up move now looks to be the FIRST LEG OF NEW BULL PHASE especially as this upmove had RETRACED EXACTLY 80% of the OCTOBER 2011-MARCH 2012 RALLY.

Another supportive TECHNICAL TOOL is the BULLISH ENGULFING candle reversal pattern on MONTHLY charts and OVERSOLD STOCHASTICS ON QUARTERLY CHARTS.