BSE Sensex Technical Trends - 01/02/2010

Market structure is the most central theme of technical analysis.

Market Structure means the basic structure of peaks and valleys.
Careful obervation of this structure(Peaks & Valleys) is the main
basis of technical analysis. The Dow theory has basic tenet on this
and stresses on it. There are usually three trends prevelant at any
given point of time. Up Trend, Down Trend & Sideways...Money
can be made in only two times...when the trend is Up or
Down...When the trend is sideways...money is often lost. Money
or capital is lost..also when a trader or investor goes against the
basic trend. Hence basic or underlying trend is very important.

BSE Sensex Daily Chart - 1/02/2010

The week ended with sensex touching the low of 15982 on Friday
29/01/10. The low was retraced and the friday candle is bullish
with long down shadow, bullish hammer...BSE Sensex has
brokendown from uptrend Channel conclusively. " The failure of
BSE Sensex to reach the top of this uptrend channel, was warning
that the trend is turning and the odds that support line of uptrend
channel might break increased.."
BSE Sensex may give a throw back and try to eneter the uptrend
channel. Yet longs should be careful...as the uptrend is now a
suspect....

Structure Of Sensex

BSE Sensex has broken down from the Uptrend channel, so

bullish structure of BSE Sensex is currently under a
scanner. Since low of 7700 in daily chart the structure was
sideways. Then it started its up move....the Elections results
created a history and led to a big gap up as seen in the Daily
charts. As observed from the Gap-up, the Structure of the BSE
Sensex is indicating Higher top & Higher bottom, a bullish
structure. Every higher low is leading to a higher top, ..... so
technically the structure was bullish.

It was observed that the last peak was lower high and the
currrent low or valley is lower low than previous low. If this persist
then, downtrend for BSE Sensex on the daily chart can be
confirmed.

Momentum Indicator /Oscillator

KST-Momentum indicator

KST Indicator which was in overbought zone, has broken down

from the Equilibrium line or zeroline. KST Indictor broke down
exactly at the point uptrend channel broke down. BSE Sensex is
clearly turned bearish with KST indicator breaking into oversold
zone.. A further fall cannot be ruled out. The bulls traditional
resting place..has been taken by bears.....KST Indicator is
sensitive enough to reverse at the major turning point of the BSE
Sensex..Hence it is also one of my favourite Indicators.

ROC -Momentum Indicator

The ROC Indicator had broken down from the equilibrium line or
zero line two weeks ago and thus given bears an upper hand.
With Roc Indicator compeltely in oversold area, the Bears seem to
have won the battle.... ROC Indicator was showing Negative
divergence...as it was fairly evident that ROC Inidicator had failed
to form new high with new market high. Bears have taken the
upper hand...

Volume
Volume has been an important indicator to gauge stock market as
an informant cog or puzzle chip in over all technical picture.

The volumes from November 2008 to January 2009 looked like

accumulation . This volume accumulation gave rise to a rally, as
seen from late March 2009. The April 2009 the rally has been on a
rising volume which was good indicator that this rally is a
powerful one. May 2009, June 2009 recorded rising one volumes
but from July volumes seems to be tapering. August 2009
volumes are normal..... but not rising. September 2009, October
2009 volume though falling...seem to be picking on the down fall.
November 2009 ,December 2009 volumes are in line previous
month volume. Janaury 2010 the volumes have been decent ....

Trendline

In the BSE Sensex daily chart the two uptrendlines were seen ,
forming an uptrend channel. The upper trendline 6 & uptrendline
3 are the clear resistance and support area for the BSE Sensex.
The Peak & Valley pattern was properly identified within the
uptrend Channel. Now a throw back can be expected..which
might try and touch the lower trendline of this uptrend channel.

Moving Averages
In daily chart BSE Sensex have successfuly broken down from the
congruence of crossover of 13ema, 34 ema & 50 sma. BSE
Sensex has a resistance of 13ema. Now this cross over of three
moving average will be resistance for BSE Sensex....

Sensex Key Support Level-- ---- 15982, 16038, 16278

Sensex Key Resistance Level---- 16599, 16522, 16407

BSE Sensex Weekly Chart - 1/02/2010

BSE Sensex Technical Trend Analysis - 15/02/2010
Ever since BSE Sensex has broken out of Uptrend Channel, the
bulls are being tampled by bears at fast speed..At every low they
are being flushed out...to more lows..the breaking of lower trend
line of the uptrend channel give a post price target of 15531...as
per the measuring implications of trend line break. Also
technically breaking of the trend channel indicates an important
change in trend. Trend Channel or channel lines, (as sometimes
they are refered to in some books) have measuring implications.

BSE Sensex Daily Chart - 15/02/2010

On Friday 12/02/2010 , trading was off due to Maha shivratri. So
the last daily trading was on thursday 11/02/2010, which gave
rise to a bullish candle with a close at 16152. All the daily candles
from monday..have given rise to rising wedge. Rising Wedge is a
bearish pattern.

Momentum Indicator /Oscillator

KST-Momentum indicator
KST Indicator which was in overbought zone, since late march
2009 did broken down from the Equilibrium line or zeroline.
Interestingly KST Indictor broke down exactly at the point uptrend
channel broke down. BSE Sensex is clearly turned bearish with
KST indicator breaking into oversold zone.. A further fall cannot
be ruled out. The bulls traditional resting place..has been taken
by bears.....KST Indicator is sensitive enough to reverse at the
major turning point of the BSE Sensex..Hence it is also one of my
favourite Indicators.This indicator is what exactly it claims to be
KST- Know Sure Thing - by Martin Pring.

ROC -Momentum Indicator

"Roc indicator is hinting at the positive divergence..in daily BSE
Sensex chart. " So short term seems little rosy. Earlier ROC
Indicator had broken down from the equilibrium line or zero line
three weeks ago. With ROC Indicator completely in oversold area,
the Bears seem to have won the battle.... ROC Indicator was
showing Negative divergence...as it was fairly evident that ROC
Inidicator had failed to form new high with new market high thus
indicating lot battle for bulls ...

Sensex Key Support Level-- ---- 15982, 16038, 16278

Sensex Key Resistance Level---- 16299, 16352, 16407

BSE Sensex Weekly Chart - 15/02/2010

Current weekly candle is small bullish candle. The previous last

three weekly candle give a candle pattern called Three black
crows..These three bearish candles have closed almost near here
lows. In weekly chart time frame three black crow comes as a rare
pattern and bearish. Three black crow presage lower prices if they
appear at high-price levels or after a mature advance.Three crows
are also sometimes called three-winged crows. The japanese have
an expression, " bad news have three wings."

As long as BSE Sensex did not breakdown from 16599, a crucial

weekly support area, emphasied with weekly horizontal trendline,
the weekly trend was considered side-ways. Current weekly trend
can be said to down due to appearance of three crow pattern.
Momentum Indicator /Oscillator For Weekly chart

KST-Momentum indicator

Currently in the BSE Sensex Weekly chart, the momentum

Indicator KST has given clear cut bearish cross over & seen
falling. So the medium trend of BSE Sensex cannot be said to
bearish just because 16599 is broken, though further free fall
weakness can be anticipated. Yet the real test will come...when
KST Weekly Indicator breaksdown and moves to oversold zone.
Currently downward momentum is rising.

ROC -Momentum Indicator.

The ROC Indicator is in the overbought zone, but resting on the

equilibrium line or zero line..with clear indication weakness. But
on further weakness it may break the zeroline. But so it appears
to have halted at the zeroline.
The weekly trend was side-ways, with crucial support area of
16599, the weekly horizontal trend line. Current weekly candle of
29/02/2010 is bearish, which has broken the weekly horizontal
trendline. Next weekly support for BSE Sensex is at 15782.

Note: Symmetrical triangle patterns at top or bottoms, often

achieve the target, not once or twice..but also three times the
post pattern targets...Weekly candle of 22/01/10 achieved the
second target of symmetrical triangle which was at 17590. LET
US SEE IF IT ACHIEVES THE THIRD TARGET TOO ...IN THE YEAR
2010.

Momentum Indicator /Oscillator For Weekly chart

KST-Momentum indicator

"Currently in the BSE Sensex Weekly chart, the momentum

Indicator KST has given clear cut bearish cross over & seen
falling. So the medium trend of BSE Sensex can definately said to
bearish..if 16599 is broken, then further free fall weakness can be
anticipated." as predicted last week.

ROC -Momentum Indicator.

The ROC Indicator is in the overbought zone, but resting on the

equilibrium line or zero line..with clear indication weakness. But
on further weakness it may break the zeroline. It is to be
observed that ROC Indicator moves into oversold zone.