SILVER AND CRUDE WITH SYSTEM

MEDIA SAYS...WE HAVE A CARNAGE IN COMMODITIES..

CHART SPEAKS :

LEVELS TO WATCH

SENSEX :

Sensex has closed both the GAPS which in normal circumstances could have given support and so it confirms our argument that the march-april rally was only a BEAR MARKET rally.

Today is the last day of the current week and as usual a weekly close is important and if sensex closes around 18100-18300 it will be a VERY WEAK weekly close which will clearly suggest that any rise in coming days up to 200 day EMA can be used to create fresh short positions.

SENSEX has also closed below 200 DAY EMA for three consecutive days which is EXTREMELY BEARISH.

But since the short term MOMENTUM indicators are in extreme oversold zone if SENSEX closes above 18339 we may see some corrective upside rally.

NIFTY :

NIFTY has also closed below its 200 DAY EMA for three consecutive days which is a negative sign and now we will see the SHORT TERM EMAS will resist any upside corrective rally in coming days.

We are going to see the worst weekly close of last few months if NIFTY closes around 5400-5500.

On the down side NIFTY has supports around 5337—5356 range and after a few days corrective upside or range bound move if nifty closes below 5336 it will be another opportunity to go short.

A close for nifty above 5503 can initiate some upside corrective.

A MIRACLE ON TEN MINUTE CHARTS

CHART SPEAKS :

I HAD EARLIER POSTED 30 MIN SILVER CHART IN WHICH ONE COULD SEE BUY CALLS FROM 59000 TILL IT REACHED 73000.

NOW SEE THIS 10 MINUTE SILVER CHART.

" MY SYSTEM NEVER MISSES A BIG MOVE ON EITHER SIDE "
has been my claim since long time and here is the proof.

A TRADER CAN CONTACT :

ADD        bhoom2tika      in YAHOO MESSANGER.

LEVELS TO WATCH

SENSEX : SENSEX continued its down ward journey and filled the first gap and closed just above it .
On daily chart the candlestick looks like a HAMMER but not an ideal one although the LOWER SHADOW indicates some support at lower levels also we have noticed A DOJI and A STAR candle patterns on other indices daily chart so over all the picture is a little bit indecisive with NEGATIVE BIAS.
WE may see some bounce back from near the second GAP today or tomorrow and SHORT TERM FUTURE depends upon the supposed upmove from GAP supports if at all a bounce comes.
Ideally any WEAK bounce upto 19000 should be used to create shorts BUT we will decide that later.
We now have two consecutive close for sensex below 200 DAY EMA a third close today will be BEARISH.

NIFTY : for NIFTY the all important support is the GAP at 5483 and if we see a NIFTY close below 5483 there will be VERY LITTLE HOPE for the NIFTY for the short term.
There is a fresh SELL CROSS from the 5/8/13 day EMA and the ADX has started to move up strongly which suggests SIGNIFICANT down side momentum.
If any bounce back from supports gives NIFTY a CLOSE above 5/8/13 DAY EMA band then we will have to think about the further more upside.
Especially if NIFTY closes above 5694 on any day.

CONFIRMATION OF A BEAR MARKET

SENSEX : I HAVE been trying convey our technical view quite categorically that the rally in sensex from end march to april-2011 is  BEAR MARKET rally only and we clearly advised every one to remain in cash from the first instance of Infosys got tanked on the result day we said that market is going to punish stocks after their results and on last Friday we said in our sms that the RBI will increase interest rate MORE than normal anticipation and the same happened.

In a single trading day SENSEX broke the first support line and also closed decisively below 200 day EMA THIS IS A TYPICAL CHARACTER OF BEAR MARKET WHERE SUPPORTS JUST DOES NOT WORK.

We are of a VERY STRONG opinion that most of the companies will have POOR performance for next two quarters and that is EXACTLY WHY THE MARKET IS REACTING NEGATIVELY NOW.

Two earlier gaps at 18374 and 18218 may act as some supports but since we now have confirmation of ANOTHER lower top after this gaps get filled we will have SENSEX targets of 17786 and 15992.

Nifty :

NO support did work in yesterdays big crash we had been said that it will be EXTREMELY BEARISH if nifty closes below 5759-5693 and that is what exactly has happened.

Up side gaps at 5531 and 5484 will act as some support but now we have a strong confirmation of a “lower top “ in place so once nifty closes these gaps it will have positional down side targets of 5356—5177-4855 –4777.

All are advised trade and invest accordingly.

SENSEX AND NIFTY HAS DOWNSIDE TARGETS OF 15992 AND 4850 RESPECTIVELY

LEVELS TO WATCH

SENSEX :  Friday was the fourth day on which SENSEX closed lower it also closed below 19171 but as suggested once it closes below 18976 it will be a “lower top “ on DAILY chart so we will wait for that confirmation in a few days.

The 5 /8 day EMA has given a fresh sell cross and ROC went down below ZERO sharply which is BEARISH.

And for any upside SENSEX has to close above 5 day EMA values at 19321 and above 19412 which is one important low.

Looking at the oversold STOCHASTICS SENSEX may try to bounce back or stabilize here for a few days.

NIFTY :  for nifty 5781 is the value of five day EMA and 5819 is one important low and NIFTY has to close above these levels for some strength.

On the down side 5697-5649 is the MOST IMPORTANT zone of supports as a close below 5697 will confirm a LOWER TOP for NIFTY on daily chart.

If nifty remains range bound below 5819 for a few days the 8-13 day ema will also give a sell cross which will be bearish.

WEEKLY TECHNI VIEW

A  FEW WORDS ABOUT TRADING AND SHORT TERM INVESTING :

A few days back we suggested in our conference call that it is high time to be in cash by at least 70% IMMEDIATE action could have benefited if we compared stock prices ten days back and that with yesterday except perhaps an ONGC or ITC or jubilliant food kind of VERY FEW stocks.

It is never AN EASY job to liquidate ones portfolio in one go as there are so many reasons like A PSYCHOLOGICAL ATTACHMENT or PRICE at which buying was done AND other sourse of information that the trader / investors might have which could have been suggesting him about a new high for the SENSEX / NIFTY  / the company he is holding.

BUT the idea is to try and catch maximum return from the price movement on both sides using TECHNICALS but most important reason that a trader/ investor CAN NOT react immediately is the belief that IF we go wrong in our prediction of a larger fall HE will miss the BULL RIDE BUT that is wrong as all readers MUST have noticed our buy side calls in the 400+ points up move in NIFTY in the last month.

So what try to convey is that even if we go wrong we will be EXTREMELY flexible and we will surely move with the markets very swiftly and if the market moves up from here we will catch stocks which are going to go up with relative EASE.

 LET US AGAIN TAKE A VIEW AT THE LARGER PICTURE :

WE strongly believe that INDIA growth story is intact AND have set very high targets for SENSEX in the LONG run but the major issue is that if we take a simple example of NIFTY even if NIFTY is to touch 7000 or 10000 in A FEW YEARS if we buy NIFTY at 5800 and IF we are to see  say 4500 NIFTY in a year or so can a trader hold it ? and better  thought is that if THE TENTATIVE target for NIFTY is 4500 WHY can not we  start buying it from say 4800 ?

For stocks it would be even difficult to HOLD or buy at current market price because if we are to see a larger fall from here it will be surely possible that some companies will never grow from the bottom so we will have to be EXTREMELY careful in selecting FUTURE WINNERS .

WE are presenting charts of FTSE and SENSEX which we presented here in October 2010.

url :

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4hepLgo_JL1x96vWhBszCkgnxq_AtQMnVaUv8gY3Mz-IBurIcsXyM7wBvN3gji0Libg_dvtQqUrUpzi7FSPekovinjCq32bIwPRex_WawB2af3QEsbpoKPKbrTEb4BJcqTpok9nIOEYvq/s1600/FTSE+100+QUARTERLY.JPEG

SENSEX QUARTERLY CHART AS ON 10^TH OCTOBER 2010 :

Have a careful look at our projections made in October 2010 and look at the DOWN SIDE progress SENSEX has made in last seven months.

Remember such projections has been made on an observation that SENSEX has been copying FTSE chart since VERY LONG , such copying can be called as MIMICKING.

TECHNICAL VIEW FOR THE WEEK STARTING 02-05-2011 :

In our  weekly technical view dated 18^th april 2011 we presented BSE IT chart and said this,

“AN IMPORTANT CHARACTER OF BEAR MARKET :

With the spread of internet and television media and with the availability of so many charting softwares etc. the subject technical analysis is getting immense popularity BUT my experience suggests that market itself behaves like a living entity and as it is REFLECTION of collective psychology when a LEVEL is published to most traders it DOES NOT work or A NORMALLY functioning indicator stops working.

We are trying to show you a typical character of bear market.

In the following chart of BSE IT we can see that there was a clean buy cross from the EMA band which we have used succesfuly in BULL MARKET but the latest buy cross has failed miserably in a single day on Friday .

So a typical buy call which is known to ALL has failed which suggests that WE ARE IN A BEAR MARKET RALLY ONLY.”

The reason of such failure of NORMAL technical tools was our observation that market is reacting ADVERSLY to the companies which declares quarterly numbers.

Here are two more examples of this “ RESULT SYNDROME “

There are more examples like this but this proves a point that “ OBSERVATION” is the key in stock market prediction also it proves that “ MARKET “ knows a lot more of future fundamentals and perhaps market is pricing in next 2-3 quarters results “ NOW “.

Also such negative reaction to stock prices gives us another confirmation that the last rally was “ BEAR MARKET” rally only.

SENSEX  AND NIFTY  :

On daily chart of SENSEX 19171 has been broken for more down side confirmation SENSEX will have to close below 18976 then the earlier highs around 18700 can give support BUT as it has happened in stocks like AXIS BANK , LARSEN AND BHEL if SENSEX can not find supports around 18700 OR if it takes support around 18620 which is the value of 200 day EMA but the recovery from their remains weak and sensex closes below these support area then it will be DECISIVE “LOWER TOP “ for sensex on weekly chart.

For nifty these levels are 5623 and  around 5600 as shown on the NIFTY chart 5623 is the value of 200 day EMA and the earlier highs are around 5600 so a close below these levels will decisively confirm a “lower top” for NIFTY on weekly chart.

FOR any upside movement NIFTY will have to close above 5912 and SENSEX will have to close above 19500.

Looking at the different sector indices this BULLISH scenario looks to be unlikely but EVEN if this happens the 80% retracement levels for sensex and nifty will remain bigger hurdles.

Here are charts of two major index movers AXIS BANK and LARSEN & TOUBRO and one can see that earlier supports DID NOT work for them which is EXTREMELY bearish confirmation of lower top for these stocks.