TECH VIEW

SENSEX: RESISTANCE level at 18000 seems to have worked very effectively and this down leg can well be proved as a FIRST leg of a FRESH AND BIGGER DOWN MOVE to come

I wrote this on 24^th AUGUST in my TECH VIEW “SENSEX made a high of 17972 as my target /resistance was 18000 and then it has closed at 17850 for today one should watch if SENSEX closes below 17705 if that happens one must not remain long anymore”

Caution for longs was very clear advise right at the top

SENSEX has closed AT an important level and a close today below 17471 will be a confirmation that we are in a fresh down leg

NIFTY: NIFTY has closed well below 5378 and 5341 for TWO DAYS now and yesterday it has closed at the 38.2% Fibonacci SUPPORT

CRUCIAL trend decider zone lies at 5260-5220 BULL GAP and there are chances that we will see some sort of a relief rally from here

But all characters of a FRESH DOWN MOVE are present

Caution was advised on 23^rd and 24^th AUGUST in these words” 5378 & 5442 were my TARGETS for NIFTY from around 5149 both targets have now been met and NIFTY faced stiff resistance at 5448

5341 is very critical support for NIFTY and a slow move up to 5341 can be only a correction BUT a STRONG DOWN MOVE breaching 5341 can be a fresh down move too”

A close above 5341 and 5399 next week can erase the immediate down side possibilities this looks difficult as of now

TECH VIEW

SENSEX:SENSEX continued its downward move but recovered somewhat in the last hour of trade

It is a small HAMMER CANDLE pattern which can bring in some more relief for bulls but i feel upside will be kind of a LOWER TOP formation only

But markets can move in any direction at its own speed and will so we have just to follow markets

17471 is more critical support for SENSEX and 17443 is 38.2% retracement level so a WEEKLY CLOSE below these levels should be a clear signal of an end of the recent up move

Till these levels are held there can be some more upside left

A STRONG CLOSE above 17725 can prove very good for bulls

NIFTY: 5294 was one support for NIFTY below 5341 and NIFTY made a low just above 5300

21 DAY EMA is a good support for NIFTY so we shall watch for one or two days close below 21 D EMA also as shown on the chart the STOCHASTIC is now in oversold zone so there can be some bounce back again

A weekly close below 5294/5287 and below 5260-5220 BULL GAP will be an end to the recent upmove

But till these levels are intact NIFTY can again attempt to reach higher

A CLOSE above 5366 in a single BULLISH CANDLE can be considered as one more buying opportunity

FOREX TRADING SYSTEM ON EUR/USD

WEEKLY CHART BOOK

WEEKLY TECHNICAL VIEW FOR SENSEX & NIFTY :

As expected both SENSEX and NIFTY retraced back from their RESPECTIVE resistance zones

For SENSEX it was around 18000 and SENSEX made a high of 17972 while for NIFTY the next target above 5378 was 5442 and NIFTY made a high of 5448

Both indices ended the week with  A PROBABLE reversal pattern called “SHOOTING STAR” and if SENSEX AND NIFTY close the next week with a big down candle there will be an end to the recent up move in our markets

In any case CAUTION was being advised in my last 2-3 DAILY TECH VIEW at these high levels

Reasons for caution for longs are many one of which is the ADX on HIGHER TIMEFRAMES and the PRICE STRUCTURE of indices for the last one year

Another reason was the EARLIER HIGHS around 18000 and 5442

An important reason is STOCHASTICS being overbought on DAILY & WEEKLY CHARTS.

For NIFTY 5378 is the first support and on Friday NIFTY made a low of 5371 but closed at 5386

More important support which can a be a real short term TREND DECIDER level is 5341 for NIFTY and 17622 for SENSEX so if SENSEX & NIFTY closes below these two levels for 2 consecutive days in the coming week the down move initiated last week can be the END of the whole up move of recent few weeks.

BANK NIFTY:

A BREAKDOWN from a small TRIANGLE PATTERN on EOD charts suggests that the RECENT FEW WEEKS up move may have ended in BANK NIFTY

Watch the support TRENDLINE on the chart

If this trendline gets DECISIVELY BROKEN BANK NIFTY will test the MAY 2012 lows one again

tech view 280812:

SENSEX: the EXPECTED down move continues and now reaching one important support level

It will be interesting to watch how SENSEX behaves at support for next two days because STOCHASTIC will be nearing oversold zone very soon on DAILY CHARTS so there can be some pull back efforts again

It is very important that since last Friday i have been warning for such a correction

17622 and 17471 are two critical supports and TREND DECIDER levels so watch for some bounce back from here if not get ready for a steep fall in our markets

NIFTY: there was a sustained move below 5378 so next support is at 5341 and more critical support zone is 5260-5220

There will be some up move from these levels and that up move will be an important one to watch

If these supports does not work we will see a more severe down move very soon

Caution for longs have been very clearly advised

A strong close above 5401 will be positive again if it happens

NIFTY HITS 5442

SENSEX:caution has been being advised at this high levels and at the ZONE OF RESISTANCE and there was a big selling pressure witnessed in SENSEX.

The zone of RESISTANCE was clearly defined well in advance as an upside target

Even yesterday FMCG & PHARMA STOCKS saved the day else the SENSEX would have plunged a lot more from the days high.

SENSEX made a high of 17972 as my target /resistance was 18000 and then it has closed at 17850 for today one should watch if SENSEX closes below 17705 if that happens one must not remain long anymore

NIFTY: 5378 & 5442 were my TARGETS for NIFTY from around 5149 both targets have now been met and NIFTY faced stiff resistance at 5448

5341 is very critical support for NIFTY and a slow move up to 5341 can be only a correction BUT a STRONG DOWN MOVE breaching 5341 can be a fresh down move too

5260-5220 will be the TREND DECIDER GAP LEVEL for NIFTY and a close below this gap will open up a bigger down move in future so watch these levels carefully

WEEKLY CHART BOOK

WEEKLY TECH VIEW OF SENSEX & NIFTY:

There is no major change in the SHORT TERM trend which is still up as on EOD CHARTS

No major change or not even any hint of change of trend as on WEEKLY CHARTS which is SIDE WAYS

I would like to post SENSEX charts with ADX on all time frames again and it shows that the LOW MOMENTUM in our markets is clearly defined by the EXTREME LOW VALUES of ADX on all time frame charts in the history of SENSEX.

IN early days ADX used to have low values BUT it would soon pick up the momentum but SINCE the slump of 2008 there has been a gradual decrease in ADX VALUES on HIGHER TIME FRAME CHARTS and since then ADX has not been able to pick up again.

SENSEX MONTHLY CHART WITH ADX :

As can be seen on both above charts first time AFTER 1996-1999 ADX has turned down sharply after 2008 crash and especially after 2010 till date

This proves that our market is not at all favourable for POSITIONAL TRADERS at this juncture.

MY EARLIER TECHNICAL VIEW ABOUT DIFFERENT SECTORS AND A FEW LONG TERM INVESTMENT PICKS:

LINK: http://bhoom2tika.blogspot.in/2012/01/2008-2011-shift-of-focus-long-term.html

I had suggested  “ SELL NIFTY AND BUY ITC/HUL “ in January 2011 and then on 2^nd January 2012 in my detailed SECTIRIAL ANALYSIS in a report named as “2008-2011 CRASH A SHIFT OF FOCUS” i had these comments on FMCG SECTOR with following chart

“Looking at broader market condition and possible PROLONGED accumulation phase in addition to a huge BULL RUN since last three year, this sector may enter a CORRECTIVE PHASE which will be giving us very good buying opportunities in panic during 2012”

And here is what has happened till date in 2012

How HUL has SIGNIFICANTLY out performed the BROADER MARKET in 2012 can be seen clearly in this chart

Read this comments about another important sector which is in STRONG BULL PHASE right now:

“Here comes an important question WHICH SECTOR will lead such a massive BULL RUN ?

We track SENSEX & NIFTY only for short/medium term view on the markets in general but a detailed study of all SECTOR INDEX charts reveal that INDIAN MARKET has been going through a great SHIFT OF FOCUS from the bigger & long term players’ point of view.

This long term money is least concerned with anything in the World Market but is focused on the intact long term India growth story.

This detailed study clearly reveals that TECHNICALS can understand such a long term shift of focus as well.

In the charts attached here, one can see that FOUR SECTORS completely underperformed the SENSEX & NIFTY for a significantly long period of time in the massive BULL RUN of 2006-2008. These were AUTO, IT, FMCG and HEALTH.

But all these sectors out performed broader markets in 2009-2010 BULL RUN and in fact out of these four sectors BSE AUTO topped out in 2006, BSE IT topped out in 2007 and BSE HEALTH & FMCG completed a DOUBLE TOP in 2008 so after topping out very early before 2008 these FOUR sectors COMPLETED a larger correction in 2008 and started NEW MEGA BULL RUN which promises to go far away from here.

Simple reason for such EXPECTATION is that all these FOUR sectors are now out performing broader markets by huge margin through this 2011 crash.

We suggest one goes through our comments on all these charts of different sectors.”

BSE HEALTH CARE MONTHLY CHART 2001-2011:

BSE HEALTH CARE INDEX also started a BULL RUN in 2003 but was a clear defensive SECTOR only till 2007 this sector too went in to deep red during 2008 but it did not remain a steady performer any more from 2009 and reached life time highs in 2010.

So it has also out performed SENSEX in recent crash and now it is showing signs of having entered a CORRECTIVE PHASE which should be an ACCUMULATION instead of distribution phase.

BUY ON DIPS would be a good suggestion for Pharma sector stocks in 2012 for a GREAT BULL RUN ahead.

CIPLA, DIVISLAB, SUN PHARMA, DR REDDY, RANBAXY ARE THE TOP PICKS IN HEALTH-CARE SECTOR.

Please read above comments made 7 months back and see what has happened to this SECTOR STOCKS in 2012

As very clearly described in my early JANUARY 2012 article “SHIFT OF FOCUS” we have witnessed that PROCESS OF SHIFT continue through 2012 and the SECTORS identified as underperformer hade continued to underperform till date.

BACK TO the FUTURE:

There is no TECHNICAL change as far as SHORT & MEDIUM term charts of SENSEX and NIFTY are concerned.

Very range bound and stock specific moves taking place

SHORT TERM bullish but now caution is advised again as SENSEX has failed to cross 17742 and NIFTY has failed to close above 5378 again.

5378-5442 is the zone of resistance and 5246-5260 GAP is an important support for the next week as well.

TECH VIEW

SENSEX: SENSEX is just a few points away from the second resistance level of 17742.

We had a good run in SENSEX in last few days but still it is very STRANGE that ADX has just now crossed the level of 25 on daily chart.

This is poor momentum.

Stoploss for all longs 17572 or maximum 17471 on closing basis also watch the STEEP TRENDLINE on SENSEX CHART as support and a stoploss for longs.

NIFTY: a close at 5380 is a close just two points above 5478 for NIFTY

Can be it be a breakout point for the TARGET of 5442 and 5489 ?

It can be but watch todays open as if NIFTY opens a GAP DOWN it must cross the open high in next 15 minutes of trade if NIFTY has to close back above 5378.

A close below 5328 in next two days will be a warning bell for longs again

WEEKLY CHART BOOK

WEEKLY TECHNICAL VIEW FOR SENSEX AND NIFTY :

A GOOD WEEKLY CLOSE but at RESISTANCE

This very short sentence describes the week gone by for the next few weeks one should watch the two LINES drawn on SENSEX chart

We are in a NON TRENDING environment and a clear TREND will emerge on the upside SENSEX can breach 2012 highs in this up move only.

Overall the PRICE STRUCTURE of the whole of 2012 looks to be of a corrective nature and AT THIS POINT OF TIME a big down move seems imminent

Offcourse i will here try and find out if i can see any STRENGTH ON THE UPSIDE which may favour BULLS

After all markets are supreme and i HAVE to follow it.

As was described in my last WEEKLY CHART BOOK very LOW VALUES of ADX on all timeframes shows that there should not be a big move on either side coming up very soon

But if 2012 HIGHS can not be crossed very soon then the PRICE STRUCTURE will prove a DISTRIBUTION PHASE only.

There is a probability that the SENSEX and NIFTY are developing a kind of BASE FORMATION around 80% retracement levels and the process of base building can still go on for a few months BUT even that case will be NEGATED once SENSEX breaches 15700 and once NIFTY breaches 4750 .

Two stock charts do worry me a lot.

SBI

LARSEN

Both SBI AND LARSEN are very critical stocks for Indian markets and WEAKNESS on their charts is nothing good for the short/medium term future of SENSEX and NIFTY.

As per my report “SHIFT OF FOCUS” we have some new leaders as far as price movement is concerned as some stocks from PHARMA AND FMCG SECTORS are still in a big uptrend but THESE STOCKS can not save SENSEX and NIFTY forever IF stocks like LARSEN / SBI are weak.

A close above 5385 for NIFTY in this week for TWO DAYS and above 17744 for SENSEX can take them even further up to 5442 and 17950 levels.

It will be interesting watch how the SUPPORT ZONE of around 5267-5246 works for NIFTY if NIFTY reaches there during the coming week.

NIFTY HIGH 5377.70

SENSEX:17681-17748 was my first TARGET ZONE for SENSEX and it was also a RESISTANCE ZONE and SENSEX retraced back swiftly after making a high of 17726 to close at 17600.

Even if the SENSEX is to reach new highs in the current up move i believe it should correct some what and give us a better BUY ENTRY.

Remember the correction must remain slow if it comes.

A candle pattern called SHOOTING STAR can be a potential reversal pattern if today we have a black candle at the close.

NIFTY:NIFTY touched 5377.70 and my target AND resistance was 5378 TARGET was met and RESISTANCE too worked as NIFTY went down sharply in the last hour of trade EXACTLY from 5378

I had suggested to EXIT LONGS and to wait to re enter after some mild correction takes place

EMA BAND is in BUY MODE but STOCHASTIC overbought and ADX not showing any great strength and momentum

Short term TREND is up but for going long again one should wait for some correction one can still take some long position if NIFTY again crosses 5378 today and stays above it.

WEEKLY CHART BOOK

WEEKLY TECHNICAL VIEW FOR SENSEX & NIFTY :

Both the indices have completed last week closing with a possible HIGHER BOTTOM and a good CANDLESTICK REVERSAL PATTERN.

Instead of 5096 i would like to shift my PRICE POINT OF TREND DECIDER TO 5154 on weekly closing basis for NIFTY and to 17003 for SENSEX.

In short the whole possibility of a HIGHER BOTTOM against the MAY 2012 LOWS would vanish if NIFTY closes a week below 5154 and if SENSEX closes a week below 17003.Protect your longs with these levels as STOPLOSS LEVELS.

Because just one HIGHER TIMEFRAME that is monthly chart is developing a BEARRISH PATTERN called HEAD & SHOULDER as explained last week.

Also remember that this BEARISH PATTERN gets complete ONLY on the breach of the NECKLINE but a weekly close below 5154 would be a first warning.

On a positive note IF NIFTY closes above 5267-5300 and if SENSEX closes above 17342-17467 there will be further upside potential up to 5378-5442 levels.

MEDIUM TERM PICTURE SUGGESTS “ THERE IS NO TREND “ :

Yes, this is a sad thing that our markets have lost MOMENTUM of moving swiftly in either direction.

I believe this will be the case till around 2015.

We will have a great buying opportunity coming up in next 1-2 years before the next big bull run starts BUT since 2009 both SENSEX and NIFTY have actually lost the MOMENTUM and they are virtually DIRECTIONLESS.

THE REASON ?

It is LOW VALUED ADX on all timeframe charts as shown on these charts

One can how ADX was moving quickly between higher range to lower range in short periods before 2009 but after 2009 ADX has been moving gradually down only that is the TECHNICAL REASON for such a dull market movement.

ADX ON ALL THREE TIMEFRAME CHARTS

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