WEEKLY CHART BOOK

once beyond 18000 SENSEX was to be in full blown bullishness and it reached the ZONE OF CAUTION shown on the SENSEX CHART in a single day

at the start of the week it was 5300-5342 which was crossed with a big move and then once above 5442 there was another big BULLISH candle with a huge GAP

Most important question is “ will the ADX move up on WEEKLY CHARTS ? “

I have no answer as i have practically learnt to JUST BLINDLY follow the markets and not to EXPECT markets to follow my own views

ADX is an INDICATOR which represents MOMENTUM in the market and the MOMENTUM can be on EITHER SIDE.

The value of ADX shows weather there is a momentum in the markets if its value is above 25 it is considered good as this high value shows that there is GOOD MOMENTUM

Typical character of ADX is that it moves up if a good up move resumes and ADX moves up even if a good DOWN MOVE starts

An ADX VALUE below 25 shows that NEITHER BULL nor BEAR is in control

ADX has been on the up move supporting recent rally as on DAILY CHARTS

This magical upmove came a BOTH SENSEX & NIFTY touched the SUPPORT TRENDLINE and also TOUCHED the earlier BULLISH GAPS and DID NOT BREACH my TREND DECIDER LEVELS of 5220 and 17292

But i expected only a bounce back and NOT such a massive rally

Luckily markets has tought me hard lessons over the last 15 years of my journey of learning the great subject TECHNICAL ANALYSIS and i have learned to GIVE my opinions about the FUTURE market moves but NEVER to EXPECT market to move in the direction i would have liked it to

Instead i have learned JUST TO FOLLOW THE MARKETS and that is precisely why i was not trapped in the recent up move even being a non believer of the massive rally

BACK TO ADX :

Here is the WEEKLY CHART of NIFTY with ADX :

One can clearly see that ADX was on the move on both side till OCTOBER 2011 but after that it has been moving down by each passing week

From the earlier HIGHS around 5629-5740 we should expect some correction and hope the correction to remain slow to ENTER LONG on very selective stocks

5448 and 5378 are two very important support levels

The GAP between 5536-5435 will have to be the key TREND DECIDER level for the SHORT TERM

18284-18062 IS THE GAP for SENSEX which should not be filled up and if SENSEX closes below 18062 one must remain very alert

17972-17664 is the price zone which is now most important SUPPORT ZONE for SENSEX and a WEEKLY CLOSE below these zone will be a warning bell for bulls

The SUPPORT TRENDLINE which worked in the last down move was drawn in the first week of AUGUST 2012: