Wkly Tech Analysis: First two months crucial for 2011

Tech Analysis

The markets carry on week ended not solitary the week but besides the month, the quarter and nearly everyone significantly the time on a prohibitive observe. What looked like a lacklustre week of trade eventually bowed barred to be a profitable week as the indices gave an upside breakout. The Sensex scaled to a prohibitive of 20,552, and in conclusion complete with a achieve of 435 points by the side of 20,509. Clothed in the process, the manifestation has gained exactly 1,000 points in the carry on three weeks.

The manifestation was besides up 988 points in place of the month, and immediately 440 points in place of the quarter. However, we did last part the time on a prohibitive observe — up 17.4 apiece cent (3,044 points).

While we are in a jiffy by the side of the start of the time 2011, it may well be recalled with the aim of the same schedule carry on time while symbols the yearly forecast, I had mentioned the risk of the Sensex re-testing another highs, and probably targeting 21,090. (Refer edition January 3, 2010). The Sensex indeed touched a prohibitive of 21,109 in the month of November 2010.

At the beginning, I would like to say the basic two months — January and February — are very crucial in provisions of indications in place of the time 2011. A harmful close in these two months may well spell tribulation in place of the markets and a colossal sell-off cannot be ruled barred after that.

On the helpful front, the reverse besides holds high-quality imply. But in place of with the aim of to go on, the markets ought to pick up again to trade beyond the 20,000-mark in place of nearly everyone part of the January. Talking not far off from levels, the Sensex may well range 22,600-23,250-23,900 on the upside. While in the legal action of a down move, the manifestation is likely to seek support around 18,400-17,800-17,125 this time.

Coming to the monthly levels, the Sensex may well look resistance around 21,075-21,425, while on the downside the manifestation is likely to seek support around 19,945 and 19,600.

Since we maintain already seen three successive weeks of gains, this week becomes crucial in provisions of the longevity of the upmove. While apiece the Fibonacci cycle, the rallies keep an eye on to terminate by the side of the last part of either fourth, eight or tenth week. If the markets are able to last part senior in place of the week, after that the overall bullish make up may well continue bullish in place of the total month. This week the Sensex may well look resistance around 20,725-20,860 and seek support around 20,300-20,155.

The NSE Nifty enthused in a range of 165 points, the manifestation touched a prohibitive of 6147 and ended the week with a achieve of 123 points by the side of 6135. The manifestation appreciated almost 18 apiece cent (933 points) in the time 2010.

Key levels to watch in place of the Nifty in 2011 are 6770-6965-7165 on the upside, while on the downside they are 5500-5300-5100. For the month, the manifestation may well look resistance around 6300 and seek support around 5970-5870.