Nifty Weekly Update for week ended 20th February 2009.
Nifty all through the week has indicated weakness. Nifty opened virtually flat moved slightly higher to 2953 then started to fall and made a low of 2709 and finally closed 2736 resulting in a net fall of 212 points during the week. Nifty has formed a long red candle during the week and erased the last two weeks gain at one shot thus again giving an indication that we are still in a bear market as the fall was more faster time wise that the rise. Till this phenomenon is reversed we have all the of fall to October lows. One key feature that has occurred during the week is that nifty has again moved below the 20 day EMA and is still falling. One point to be noted is that nifty is struggling to move above the 50 Day EMA. From the month of October onwards nifty has just touched/moved fractionally above the 50 DEMA and immediately fallen. So in the coming weeks the 50 Day EMA should be closely watched as any breach of it successfully on upper side will give an indication for us to go long on the market. As 20 day EMA is still below the 50 DEMA and price is also moved below the 20 DEMA it goes on to prove that further down sides are not ruled out. 20 DEMA is at 2830 and 50 DEMA is at 2890 so these are the levels on the upper side which should be closely watched as nifty might face strong resistance at those levels. When ever those levels are reached you stop loss should be tightened.

Elliott Wave Analysis:
From last few weeks I am discussion two options one being triangle and other being a flat. Both of them neither are nor ruled out as of now and it appears it is in favor of triangle.

Last week I have indicated that we the minimum 50% retracement for “e” wave has completed and nifty has moved above the next 61.8% resistance level at 2961 it has made a high of 2669 and then fell in the previous week. In the current week it moved slightly moved near the 61.8% at 2961 high during the week was at 2953. The failure of this to move above 2961 has suggested that we might see a quicker down sides and it will be confirmed by the break of the b-d trend line. During the week it has nearly taken support at the b-d trend line and slightly moved up. The b-d trend line is at 2680. As the coming week is a truncated week and also a derivative settlement week we might see a good amount of volatility and market moving in either direction. The start of the week we might see the market moving towards the 2800 and also 20 day EMA at 2830. Any failure to move above the two levels will indicate weakness and should be taken as an opportunity to short the market and any break of the b-d trend line will confirm the completion of the triangle and nifty might attempt to move towards the October lows.

Flat:

Last week I have indicated that we might has completed the irregular flat and we might be in ultimate 5th wave and it has all the chances of making a new low of October 2008. It may be noted that the rise from the low of 2661 to 2969 consisted of only three waves. As the raise of counter wave consisted of three waves in indicating that we might have completed flat at 3147 last month. It appears that we have completed wave-A and wave-B of the fifth wave and we might have just started the 3rd wave. Generally the 3rd wave will be the most violent in price terms, indicating that we might see a vicious fall from the current levels, vicious fall might be sharp fall in very short time. Considering this we might be in for a good fall.
Directional Momentum Index (DMI)

During the week DMI has slightly moved up from14.75 to 15.13. But the –ve break out of the one week previous week has not converted into –ve break out as -D1 line has moved above +D1. After -ve break out the DMI is moving up indicating that bears are gaining upper hand and also the –D1 line is raising at a faster rate also indicating that bears are gaining upper hand at a faster rate. We have to watch out for movement of DMI above 20 for any strength of the direction. In October also it has give a positive break out after –ve break out and immediately has give a –ve break out and market tanked we have to see whether the same happens now or not.

Resistances: 2750/2800/2830/2900
Supports: 2700//2661/2503/2223

M.Sri Mahidar

Sunday February 22nd 2009 time 8.00 PM IST

Sunday February 22nd 2009 time 8.00 PM IST

Nifty Update for week ended 14th Februaty 2009

Nifty Weekly Update for week ended 14th February 2009.
Nifty all through the seek has been trading in a band of 100-120 points and up to Thursday it was in a band of 50 points between 2870-2920 and it was only Friday it has made some movement. Nifty opened during the week on 2843 made a low of 2840 high of 2969 and closed at 2948 a rise of nearly 100 points over the previous weeks closes. One point may be noted is that nifty did not move below the last weeks closing price during the entire week indicating that bulls are at present maintaining the price and it appears to be seen whether they will be in a position to maintain the same at higher levels for long time. On weekly charts nifty has during the previous week has formed a hammer which is a bullish sign and followed it up with a green candle during the current week giving an indication that bulls may be taking center stage at this stage of the market and we may not be surprised if higher levels are also achieved in the coming week. One point to be noted is that the low of the week i.e 2840 should not be violated at any cost as this would give bears an occasion to celebrate in a big way. So keep a close watch on 2840. Being a technical analysts I should not be speaking about the budget etc., but it appears that market is expecting some positive vibes in the interim budget which is going to be presented on Monday 16th February and once it is over the market is going to determine its own course either up or down but currently it appears that the bias is on the down side. One point to be noted and which I have been discussing over the week is that we are forming higher bottoms from the month of November onwards which is a very positive for bulls and at the same time we are also forming lower tops and it is narrowing now and we might see violation of one or the other and we might see a big movement in the direction of violation. Considering this the intermediate top is 3147 and them 3240 and violation of 3240 has all the chances of taking market to 3500 and above easily and the intermediate bottom is at 2661 and 2502 and any violation of the same will result in markets tanking to new lows i.e 2000-2200 levels. So we have to keep a very close watch on those levels.
Elliotte wave Analysis:
From last few weeks I am discussion two options one being triangle and other being a flat. Both of them neither are nor ruled out as of now and it appears it is in favor of triangle.

The triangle which I have indicated during my last few weeks update is still not ruled out till the a-c line is violated it still holds good. The minimum target for the “e” wave has been achieved and it appears to me that we are in the completion of “e” wave. You might be having a doubt of what should be the maximum target of the “e” wave in this case till the a-c line is not violated the pattern holds good. The a-c line is at 3100, so till 3100 is violated on upper side we have all the chances of continuation of the “e”wave. As .618% of “e” wave is violated we are on our course to 3050 after which we might see the market tanking and violating the b-d line which is at 2700 so on nifty moving below the 2700 triangle will be complete and we might see the market moving towards the October 2008 lows. So in the current scenario 3100 and 2700 are the crucial levels to be watched out. So it appears when ever we are near to 3050-3100 our longs should be protected.

One of the points to be remembered in case of a triangle is that the “e” wave should take longer time that it took to form wave-d and shorter that that of “d” wave in value terms. With regard to the time period I has already took longer time that that of “d” wave and we should wait for it not to cross 3147 at any cost but prior to that we have to be watchful at the –a-c line at 3100 levels.
So during the current week keep a watch at 3050-3100 closely.
Flat:
You might be wondering why I am still discussing the flat in the current scenario. I have observed one phenomenon during the week which is still not indicating that the flat is ruled out so we will discuss the same below:

In the above case it appears that flat has completed and we might be in the formation of “b” wave of the 5th wave from top of 6347. In the above chart Flat appears to have completed at 3147 and we are in the “b” of the 5th wave and we might be in the final wave of the “b”. The wave “b” of the 5th wave is indicated by a parallel trend lines and we any violation of it on the lower side will open up market in favor of bears. The you might be having a doubt as to what will be the support which has to be broken in this case
It is at 2840 any break of 2840 will result in nifty opening gates on the down sides. So 2840 is the crucial level to be watched out for.

We should see the indices in the 10 minute chart which I see regularly for trends in shorter time frame

The 10 min chart which is shown above is indicating that we might be in the end of the “b” wave and any violation of the red line indicated in the chart will open up gates on down side atleast towards 2850 first and any break of 2850 will break up gates towards 2600 levels.The red line is present at 2900 and any break of the same should be taken as a shoring opportunity with stop loss at those levels. So Keep a close watch.

It appears the we are entering into a week which is very crucial for the future movement of the market. So the coming week is going to be a very event full weak for the market. So be prepared for the same.

Directional Momentum Index (DMI)
During the week DMI has slightly corrected from16.42 to 14.75. But +ve break out as +D1 line has moved above -D1. After positive break our the DMI is moving down indicating that the up move is lacking strength at this point of time. DMI is also indicating that nifty either movement is directionless. We have to watch out for movement of DMI above 20 for any strength of the direction. In October also it has give a positive break out after –ve break out and immediately has give a –ve break out and market tanked we have to see whether the same happens now or not.

Resistances: 2969/3000/3100/3150/3250
Supports: 2900/2840/2750/2661/2503/2223

M.Sri Mahidar,

15th February 2009, Time: 8.50 PM IST

Weekly Nifty update 7th February 2009

Nifty Weekly Update for week ended 7th February 2009.
Nifty during the week has been in a very close band of nearly 120 points. It opened at 2872 made a high of 2873 and low of 2752 and closed at 2843 there by resulting in loss of 31 points from previous weeks close. Nifty is refusing to go above 2880 and go below 2750 there by it is stuck between these two limits. It appears the selling pressure is coming into nifty when ever it goes near 2880-90 levels and when ever it reaches 2750-25 level buying is coming into the market. But volumes have been the disappointing of all the movement of nifty is on very thin volumes indicating lack of direction for the market. Low volumes and also tight movement on nifty in very narrow band is giving an indication that we might be in a triangle and also might be in the last leg of the triangle on completion on which we might see a big movement in nifty. The movement might be in the range of at-least 400-500 points. The lack of interest and the direction is also the peculiar feature of triangle. Generally during the beginning of triangle there is huge volatility and volumes and as it nears the completion, there is complete lack of direction, volumes and also every body gets bored by the slow movement of markets in either direction and suddenly the market take a direction and move in one direction with huge volumes and then we should trade or invest in that direction. One thing is sure till market is above the bulls are having upper hand and the region between 2800-2750 appears to be no trade zone and below 2750 bears should have upper hand and it is better if we trade accordingly. One point which may be noted is that during the formation especially the end of the triangle trading in options is not recommended as the market does not move in one direction we will be going on loosing money in options. So it is better to trade as indicated above. One point to be noted is that nifty has again gone below the 20 day EMA indicating that bulls might be gaining strength shorts if any may be closed. The 20 day EMI is placed at 2820 any move below that should be good news for ears of bears.
Elliotte Wave Analysis:
From last few weeks I am discussion two options one being triangle and other being a flat. Both of them neither are nor ruled out as of now and it appears it is in favor of triangle.

Triangle:

As can be seen from the above chart nifty appears to be forming a triangle and we are nearing the completion of same. So better watch out. Last week I have indicated that we might be in the “wave-e” the last wave of the triangle and if has all the chances of retracing 50% of the “wave-d” and the 50% retracement is placed at 2901 and if nifty goes above 2901 and then breaks below 2901 then we can coolly short nifty with stop loss at 2901 or the high above 2901 as per your comfort. Any close below 2700 will confirm the completion of the triangle.
Flat:
As has been discussed in my update two week back also holds good now also. In this case flat appears to have completed at 3147 which also signaled the end of wave-4 one high wave structure and we see to be in the final wave-5 after completion of which we might see a good news for bulls as nifty might at-least recover 50% from those levels. It also appears from the chart that we might be in the wave 2 of the wave-5 and wave-2 appears to be forming a flat and after completion of flat (wave-2) we might see wave-3 of wave 5. Generally wave-3 will be violent of all the waves as it will result in high erosion of capital. In my opinion we might be just near completion of wave-2 of wave-5.
Directional Momentum Index (DMI)
During the week DMI has slightly corrected from18.83 to 16.42. But still we are in –ve break our as –D1 line is still above +D1 and –D1 is flat and also DMI is moving down indicating that the up move is lacking strength at this point of time. DMI is also indicating that nifty either movement is directionless. We have to watch out for movement of DMI above 20 for any strength of the direction.

Resistances: 2901/2950/3000/3147/3250
Supports: 2800/2750/2661/2570/2503/2223
M.Sri Mahidar

Date:8th February 2009 Time:07.45 PM IST

Nifty Update for week ended 30thJanuary 2009

Nifty Weekly Update for week ended 30th January 2009.

Movement of nifty during the week is indicating some strength and also pointing towards further slight upward movement. The movement during the week has not completely negate the bearish sentiment in the market, it still holds good till the high of 3147 and 3240 are violated we have all chances of nifty making a new low. Movement of nifty in the coming week is going to be crucial as it will be encountering some crucial resistance levels which as per the current scenario appears to be difficult to break easily. As the last week being a derivative settlement the movement was mainly due to shifting of positions from Jan to Feb. One point to be noted is that the up movement of nifty was on low volumes even though it was the first day of the current month series. This indicates some down ward bias in the market. The movement of nifty has indicated that 2800 is going to be very crucial level for the nifty and any violation of the same opens gate for making a new low. Volumes have to pick up in the up moves otherwise it indicates weakness in the market. One point to be noted is that till nifty is above 2800 there is no problem for bulls.

Elliotte wave Analysis:

From last few weeks I have been indicating two alternatives in the patterns one being a triangle and the other being the flat. And I have said in my previous updates that Triangle pattern does not hold good as on date. But the movement of nifty during the week has again indicated that it still cannot be ruled out as nifty is now also forming higher bottoms and lower tops. The pattern is forming for the last three months and we may see a decisive break out from either of these patterns. I will discuss the Triangle Patter first and then Flat.

Triangle

It can be seen from the above chart that nifty might be forming a triangle over period of three months from end of October 2008 and it has completed three months and we have all chances of it completing it in the current month. As can be seen from the chart nifty appears to have completed four wave and we might be completing fifth and final wave. Generally the movement of market will be in the direction of wave-b and in this case wave-b is downwards so we have all chances of nifty breaking downwards after completion of the triangle. Wave-d of the triangle is from 3147 to 2661 a fall of 480 points and the wave-e should be at-least 50% of the same considering this wave-e should be of length 240 points from 2661 and target comes to 2901 and we are just near it a weekly close of nifty is around 2874 just fraction away from the level if 2901 is broken then we might see nifty raising another 50 points and after that we might see a very violent fall in the markets. So better watch out for the sudden chance in the direction of the market.

Flat

With regard to flat what ever is discussed in my last weeks update still holds good and no further elaboration is required in this case. One point I wish to point is that, in case of flat it appears that we might be complete wave-2 of the fifth wave and after completion of same we might see wave three. Generally wave-3 will be violent of all the waves and it results in major price erosion. So be prepared for the same.

Directional Momentum Index (DMI)
During the early part of the week we have seen the DMI raise above 20 and on Thursday and Friday DMI has slightly corrected to 18.83. But still we are in –ve break our as –D1 line is still above +D1 and –D1 is flat and +D1 and also DMI is moving down indicating that the up move is lacking strength at this point of time. Last week I have mentioned that after DMI moves above 20 we might nifty suddenly reversing and then we again suddenly see it moving in the direction of the break out which is currently down. So the coming week is going to give a very good indication for the future movement of the markets. So be prepared for sudden reversal of market.

Resistances: 2901/2950/3000/3147/3250
Supports: 2800/2661/2570/2503/2223
M.Sri Mahidar
1st February 2009 time 9.30 PM IST