Weekly technical Analysis for week ended 2^nd  June 2012.Nifty ended the week on a weak note and it has closed below all the EMA which is a weak indication. Market continues to be weak and also its pointing towards further down sides in the market. During the current week nifty moved up and failed to moved above the 20 day EMA, it found resistance at that level and then fell which indicates weakness in the market. One of the positive things is that MACD has still not give a sell signal which gives an indication that when ever the market tends to move down buying might emerge but we have to see how the market actually behaves.one of the points to be noted is that from November 2010 onwards when even market has moved up and then moved down invariably it broke the previous low and we have to see whether this time also the trend is followed. If it has to be followed then we have to see a low below the dec 2011 lows which happens to be around 4544 will it go there. We have to wait and watch. When ever this phenomenon is violated that we can assume that bulls have gained strength and we can expect a healthy up move in the market. Till this happens we can expect the market consistently moving down and trend is continuing. One of the points to be noted is that nifty is again at the 200 week EMA and we have to see whether it again offers support or not.  In December nifty moved below the 200 week EMA and then reversed with vengeance and we have to not see whether that again offers support or not. 200 week EMA appear to be around 4800 levels. So we can expect the bulls to defend their territory which they have defended successful over three years. Bears are trying all their means to break through the support level but not successful. So considering this the 200 week EMA appear to be laxmanrekha for the bears, till they take the market below this rekha they cannot take the market down. So the coming weeks is going to be interesting week as we can see a keen tussle between bulls and bears and we can also expect the market volatility to increase. So till the 200 week EMA is taken out its not advisable to short at these levels. Wait patiently for this barrier to be taken out. It taken out I can assure that bull would run for cover. And historically seeing when ever 200 week EMA was taken out, market has tanked heavily. So have patience and wait for the lakshman rekha to be taken out and then bears can have field day.

On thing to be noted is that over the last three week nifty has made three weekly candles in which the low of each week is above the low of previous week which is a good indication for bulls especially when the market is near the 200 week EMA and it clearly indicates that bulls are preparing an ammunition to foil any attempt by the bears. So be carefull as the market might  be very volatile and we can expect unexpected movement in the market.

It can be seen from the below chart that nifty has been failing to go through the resistance line drawn from the January 2012 highs, at-least during the last three months It failed to move above and every time it moved near it selling pressure came and the market fell. The trend line appears to be around 5000-5050 levels so any up move might find resistance at this levels and we have to be watch out at these levels.

Still my soft ware problem is not rectified so I am unable to give my Elliott wave updates. This weekend also I am not available so may not be in a position to post the technical update. I would try to do it if the time permits and internet is available.

M. Sri Mahidar

Trend is Friend

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Sunday, June 4^th 20.24 IST