The market ended the first trading week for 2011 in a disappointing note, having tanked more than 140 points in the Nifty and nearly 500 points in the Sensex on Friday, the 7th January 2011.
The benchmark Nifty has ended below the psychological 6,000-mark while the Sensex breached the 20,000-mark.
What is in store for the markets on 10th January 2011? Will the market rebound?
The one-look Ichimoku chart depicted above throws up some interesting points worth pondering.
The benchmark Nifty has ended at 5,904.60, well below the Kumo cloud, the first time Nifty closing below the Kumo cloud since the third week of May 2010.
The closing price of 5904.60 was below the Kinjun Sen and the Tankan Sen.
The Chikou Span also ended below the lagging price, another negative sign.
One indicator of solace that needs consideration is that the Tankan Sen has not crossed over the Kinjun Sen. The Tankan Sen is at 6,032.33 and the Kinjun Sen is at 5,951.10. Both the Tankan Sen and the Kinjun Sen are flattening.
The market might look for a short term bounce back on Monday with limited gains. The Nifty might face stiff resistance at the Senkou Span A, or the lower wall of the Kumo Cloud at 5,937. If the index manages to clear that hurdle successfully, then it might face stiff resistance again at 6,014.
There might be temporary respite for the downtrend in the Nifty and some minor gains may be witnessed over the next few trading sessions, as long as the Tankan Sen stays above the Kinjun Sen.
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