WEEKLY CHART BOOK

TECHNICAL VIEW FOR THE SENSEX AND NIFTY FOR THE WEEK STARTING FROM 30^TH JULY 2012:

Another month is about to end with a dismal note.

We had a good CANDLE reversal pattern last month but unfortunately SENSEX & NIFTY could not produce a strong up move to confirm a good bottom suggested by the single TECHNICAL TOOL called BULLISH ENGULFING LINE

Enough signs of further WEAKNESS but there will be some corrective up side again and the STRENGTH and WEAKNESS of this move will give us more clues in the future of our markets.

5267 was our CUT OFF LEVEL for longs and once that level was gone NIFTY plunged almost 200+ points in almost 10 working days.

5164 is the FIRST NIFTY LEVEL to watch for this week.

5267-5300 will be a very critical zone of RESISTANCE to watch for next couple of weeks

This zone is more critical in the context of MONTHLY CHARTS as well because i am trying to show you a DANGEROUS PRICE PATTERN unfolding on the MONTHLY SENSEX CHART.

This pattern has the potential to drag SENSEX towards nearly 12000 in the medium term BUT DO REMEMBER that the pattern gets COMPLETE ONLY ON THE BREAK OF THE NECKLINE.

It is a TOP HEAD & SHOULDER.

Also note that i am not suggesting to go short right now as this pattern may take a few more months to unfold also this pattern is developing on MONTHLY CHARTS so we shall have ENOUGH TECHNICAL EVIDENCES on other LOWER TIMEFRAME CHARTS to TIME the CRASH if this pattern is going to complete in the near future.

I REPEAT the PATTERN COMPLETION is on the BREAK OF the NECKLINE.

For the SHORT TERM there is still some hope as if someone remember my last WEEKLY CHART BOOK LEVELS , i had suggested 5096 as THE trend decider level on WEEKLY basis and NIFTY has managed to close the week at 5099 after making a low of 5032 my next support was 5016.

For SENSEX the WEEKLY LEVEL was 16815 and SENSEX has closed the week at 16839.

The DANGEROUS HEAD&SHOULDER structure will have its impact later on but for the SHORT TERM as on WEEKLY CHARTS we can not negate the possibility of a HIGHER BOTTOM as of now so watch next few weeks and my TECH VIEW as we will try to understand how & when THE TOPPING PATTERN will unfold or not.

For the coming week first zone of RESISTANCE will be 5164-5197 for NIFTY AND 17047-17129 for SENSEX and we will get FIRST SIGN of a healthy up move if BOTH INDICES can manage a close above this RANGE in first two days.

Confirmation of a STRONG HIGHER BOTTOM will come if NIFTY CAN CLOSE ABOVE 5267-5300 and if SENSEX CAN CLOSE ABOVE 17342-17467.

Failure to do this will be considered a negative sign for even the short term future.

On the DAILY CHARTS the FALLING TRENDLINE will also be a STRONG RESISTANCE to watch in the coming week.

DAILY TECH VIEW :

SENSEX: THE BREAKOUT ZONE of earlier double bottom pattern is around 16550 and that was a clear support zone as can be seen on SENSEX EOD CHART

And on the weekly basis i had shown 16815 as a crucial level to watch and SENSEX closed the week above 16815 and made a low of 16598.

A sustained move above 16975 today can take SENSEX towards 17047-17129 zone which is a STRONG RESISTANCE ZONE.

Watch if SENSEX can close this GAP and one can go long if this happens.

NIFTY: NIFTY found support around 5020 and managed to close the week above 5096 but important levels for today and tomorrow will be 5164-5197.

If NIFTY sustains above 5149 it may try and touch this zone and one can go long for the SHORT TERM if NIFTY shows sign of closing above 5197.

If NIFTY can close above 5197 it will also give a close ABOVE the TRENDLINE RESISTANCE.

5149 and 5096 will be the STOP & REVERSE LEVELS if there is a long initiated on a NIFTY CLOSE above 5197.