Nifty Weekly technical update as on 30th January 2010

Weekly technical Analysis for week ended 30th January 2010.
Nifty opened on a weak not on Monday and continued thorough out the week and finally closed on a positive note on Friday. During the last two days of the week bears have tried their best to take the market down but bulls have provided support a the lower levels i.e. there is substantial buying which is coming into the market. The power of the bulls at-least for the short term is visible by the long tail indicated in the chart. The long lower tail indicates the strength of the bulls. Considering this it appears that atleast for the shorter term 4766 would provide support for the market and if it is taken out then we have next support only at 200 day EMA. One of the noticing features of the market this week is that it has formed a lower low. This is the first time in the last 11 months that nifty has formed a lower low and this indicates that weakness has set into the market and further lows are not ruled out. So as on now unless and other wise market makes a new high this is not violated. Another noticing feature is that nifty has broken the trend line drawn from the lows of May 2009( low made just before election result) indicating weakness in the market, nifty has to move above the trend line to indicate strength of the market. As of not the market appears to be in extremely oversold position and for the short term it appears that the market is poised to move up. It may be noted that generally whenever long term trend line are broken on upsides or down sides, markets/stocks generally recover and move near towards trend line and then fall very fast. Considering this we might see nifty moving towards the trend line and then fall. Currently trend line resistance appears to be around 5050 levels and nifty has all the chances of moving near that level. So if nifty moves near 5050 or just above 5000 we can see for a very good shorting opportunity if the market turns down with stop loss at the resistance line. So market is just proving an opportunity to go short on rise. Another point to be noted is that a week previous nifty has moved down below 15 day EMA and during the week it has moved blow the 100 day EMA indicating good amount of weakness. Nifty has moved above 100 day EMA in April 2009 and till not has not moved below it at-least for one day. And currently 100 day EMA has not offered any resistance and nifty broke through it easily and also stayed below it for three days indicating that the break out might be successful. Till now 100 day EMA was forming a support and now it would offer good amount of resistance, 100 day EMA is present around 4950 levels. So any movement near 4950 levels should be seen as a suspicion. There are some cases where in market move just above the MA and then fall. So any movement of nifty above 100 day EMA and then breaking below it should be taken excellent shorting opportunity.
I have been indicating form the last two months that market has unique habit of correcting in the just after 11 months and 11 months have completed on 15th of January and you see the result markets have corrected. So we cannot ignore the correction this time. As far as the market is concerned any rise of the market should be taken as a opportunity to book profit and stay in case as in future we might get very good opportunity to enter into the market. So trade or invest accordingly.
Nifty is also below 15 day EMA, so all the raises should be taken as an opportunity to go short with stop loss at 15 day EMA. 15 day EMA is at 5065 and till market trades below that level the trend can be seen as down.

Positives for Nifty:
• Market is above 200 day EMA.
Negatives for nifty:
• Nifty is below 1 5 day, 50 day and 100 day EMA.
• Nifty has also moved below the 15 week EMA for the first time in last 11 months.
• Daily MACD is in sell mode.
• Weekly MACD and TRIX are still in sell mode.
• -ve Divergence in RSI on weekly and daily charts.
• DMI has given a sell signal and has moved above 20 indicating that the down ward movement has set in and further downs sides are not ruled out
It can be seen from the above that all the positives have gone and we are seeing the negatives are increasing indicating that bears are just gaining upper hand in the market.

Elliott wave analysis:

As per Elliott wave it appears the trend might has turned down and we might be heading down wards. I have indicated in my earlier monthly analysis the probable alternatives and in the next week I would again give the probable formation and structure and the targets. But today I would be giving the minimum targets which markets have to achieve if the reversal is correct. As per the Elliott wave if market is correcting the entire rise from March 2009 then we have the minimum target of 4650 and in my view it should be 4246 which is the 38.1% retracement.
Directional Momentum index – (DMI)
DMI indicates the strength of the current trend whether up or down. During the last few week –D1 moved above +D1 indicating strength of bears. But during the current week it has moved above 20 and moved very swiftly towards present 27 indicating that the trend is gaining strength. As the current trend is down it indicates that strength of down trend is increasing and bears are gaining upper hand and they would further push the market down. The movement of DMI swiftly above 20 is indicating that the intensity of fall might increase in future periods.

M.Sri Mahidar
Sunday 31st January 2010, Time 14.40 IST
Trend is friend

nifty intraweek update

Larsen and toubro

Larsen and toubro:Rs.1472/-

Nifty weekly technical update

Weekly technical Analysis for week ended 23rd January 2010.
Nifty opened on flat note and it moved above and closed on positive note and there after whole through the week and reached pinnacle on Thursday and Friday where in nifty tanked to move below psychological level of 5000 and finally closed above 5000 on Friday. On Friday nifty opened on a very weak note to make a low of 4954 and later in the day recovered to close at 5036. Nifty fell and recovered on later on Friday the volumes were at a record high indicating for the time being that heavy buying has come into the market when nifty fell sharply on Friday. Nifty has exactly found support at the trend line drawn from the lows of June 2009 and on just piercing the line the indices have bounced like a spring action. This is giving an indication that in the two to three weeks we might not see the bottom made on Friday. There a long tail (shown in the chart with a blue circle) when the market fell on Friday, the long tail which is formed on Friday indicates the strength of the bulls. Generally it is observed whenever the long tails are formed these are not easily broken generally associated with unexpected recovery. Unexpected recovery in this case indicates that nifty might move up rapidly surprising everybody. I has also observed that majority of the stocks which form nifty are in extremely oversold condition which is also indicating the recovery is near. Another thing which has to be considered that if the bottom of the long tail at 4594 is taken out then we can see a panic selling in the market. On the important even during the week is that nifty has moved below 15 day and also 50 day EMA in one week only indicating the strength of the bears but till 4943 is violated there should not be problem for bulls. So 4943 is the crucial levels to be watched in weeks to come.

It can be seen from the chart that above indicated by blue arrows that nifty has been finding support at the trend line and this time also indicated by blue circle has found support exactly at the trend line. As I have been indicated in my earlier updates till this line is respected there would be no problem for bulls. This time also as it has taken support at the trend line indicating that for the time being bulls are still have strength and bull market is still intact. Once this support line is taken out we can safely assume that bull market has ended and come into cash.
Positives for Nifty:
• Nifty 100 day EMA
• RSI is above 50
• DMI has given a buy signal but it is still below 20, it has to move above 20 to confirm the strength of trend.
• Daily MACD is in buy mode and also above the trigger line.
• Market is forming higher highs and higher lows.
Negatives for nifty:
• Nifty is below 1 5 day and 50 day EMA.
• Weekly MACD and TRIX are still in sell mode.
• -ve Divergence in RSI on weekly and daily charts.
• DMI is still not moving up
Elliott wave analysis: For the last two to three months I have been indicating that 5195 and 5520 are the crucial levels which have to be cleared. Nifty has moved above 5195 moved till 5300 and then reversed and then moved below 5195. We have to still chances of moving towards 5500. Till 4943 is not taken out we have still chances of moving toward 5500, so 4943 is the level to be watched in the coming weeks.
Directional Momentum index – (DMI)
DMI indicates the strength of the current trend whether up or down. During the current week –D1 has moved above +D1 and is steadily moving up indicating the strength of bears.DMI has moved from 16 to 18 indicating the bears are gaining strength. But till now it has not moved above 20 to confirm the trend.So we have see whether it moves above 20 or not. If it moves above 20 then the pace of fall would increase.
TRIN:
This week I am mentioning about TRIN also know as arms index, as this is one of the indicator which tell where the buying is going eight by bulls are bears. During the bear markets it would be above 1 and in case of bull market it is below 1. It is purely based on volumes only; it does not take into account price but generally give the undertone of the market i.e. whether buying is going into advancing stocks or stocks which are falling. Generally TRIN would be inversely related to the market, when market raises TRIN would fall and when market falls TRIN should rise. TRIN is at present at 0.70 and is moving down indicating that buying is going into stocks which are rising and not into stocks which are falling. When the market is falling for one week TRIN should move up but it is also moving down which indicates that we might see reversal of the market very soon. TRIN is giving an indication that we might see market rising very swiftly. As TRIN is below 1 it is clearly indicating that we are still in bull market and not the bear market. So once TRIN starts to move up and moves past 1 the markets would start to fall very rapidly. So we have to keep a watch on TRIN carefully as it shows where buying is going into.
Pivot Point Trading Strategy:

Last week pivot point trading it moved below pivot and then just collapsed for the coming week pivot is placed at 5094 and if nifty breaks above this we have chances of seeing 5234 and there after 5432. But if nifty fails to move above 5094 nifty has all chances of moving towards 4896 and 4756. So we can trade accordingly.

M.Sri Mahidar
Sunday 24th January 2010, Time 17.24 IST
Trend is friend

Larsen and toubro

Larsen and toubro - Rs.1635/-

Bank Nifty9135. Bank nifty is forming a triangle for last three months and is on the verge of breaking out of a triangle. On upper side any close above 9200 would result in upward break out and any close below 8800 would result in down side break out. On either side bankek would have rally of 1300 points, so the target comes to either 7500 or 10500. if nifty fails to break above 9200 now then we have all fair chances of seeing 7500. so keep a close watch as banking stocks have very good waitage on nifty. so we can see good rally in nifty bank nifty in comming weeks and it can be on either side.

M.Sri Mahidar

Trend is friend.

Glenmark Pharma

Glenmark pharma - Rs.285 is looking good on charts and is poised to move further towards 350-400. Stop Loss Rs.250

Nifty weekly technical update as on 17th January 2010

Weekly technical Analysis for week ended 16th January 2010.
During the week nifty opened on a weak note made a low of 5169 and there after moved up to make a high of 5279 and finally closed at 5252. Whole through the week nifty oscillated only 100 points and on the last two days it oscillated only in 30 points only. One of the noticing features of this week’s movement is that nifty has taken support at the 15 day EMA and bounced instantly indicating the 15 day EMA is proving good support for the market. As nifty is still above 15 day EMA all the falls should be taken as an opportunity to go long, it appears to be at 5211. So till nifty is above 5211 bulls would be having upper hand. But bulls to gain upper hand they have to move above and close above 5300 then only it would have all chances of moving towards 5500. But any close below 5200 especially below 5180 would strengthen the hands of bears. If nifty closes below 5180 then it has chances of moving towards 5111 and 5050. But till 4943 is not violated bulls would have upper hand. It may be noted that nifty has completed 11 months of rise and there are many instances where in markets have corrected after completion of 11 months. If it does not correct now we have all chances of nifty moving up till the middle of March 2010 to complete 13 months of rise which happens to be next Fibonacci.

It can be seen from the above chart that nifty is finding resistance at the trend line drawn from the high of May 2009 which presently happens to be at around 5320 and strong move above this trend line wound offer tremendous strength for bulls and any failure of nifty to break that would not rule out further down sides for nifty.

It can be seen from the above chart that nifty is moving in a rectangular pattern is still not came out of the pattern. On the lower side the support is at 5050 and till this is not violated there would be no problem for bulls. Nifty has to close below 4940 for trend reversal as once it closes below 4940 lower bottom is formed which confirms that trend might have reversed.

Elliott wave analysis:

For the last two to three months I have been indicating that 5195 and 5520 are the crucial levels which have to be cleared. I have also indicated that 5195 is the crucial level to be broken an if it is broken then we have fairly good chances of nifty moving towards 5520 and any breach of the same has chances of taking market towards a new high. Nifty has successfully moved above 5195 and closed above it which is giving an indication that in a month or two nifty has chances of moving towards 5500 so be prepared for the same. But in any case 4943 should be closely watched. During the week nifty has found support again at 5195 should augur well for bulls.

Positives for Nifty:
• Nifty is above 15 day, 50 day and 100 day EMA
• RSI is above 50
• DMI has given a buy signal but it is still below 20, it has to move above 20 to confirm the strength of trend.
• Daily MACD is in buy mode and also above the trigger line.
• Market is forming higher highs and higher lows.
• OBV has moved above the trend line after breaking through it.
Negatives for nifty:
• Weekly MACD and TRIX are still in sell mode.
• -ve Divergence in RSI on weekly and daily charts.
• DMI is still not moving up
Directional Momentum index – (DMI)
All +D1, -D1 and DMI are moving down. +D1 is above –D1 and is moving down. DMI has moved from 19 to 18 during the week indicating that the market lacks direction. So we have to still to wait for DMI to move above 20 for confirmation of the trend.
Pivot Point Strategy:

During the week nifty has just followed the pivot point strategy. I moved below the pivot made a low of 5169( S1 happens to be 5171) then moved above the pivot of 5240 and made a high of 5300 ( R1 was 5314). And now poised just above the pivot. If nifty breaks pivot on down side it has chances of moving towards 5181 and 5109 and if it stays above it then it has chances of moving towards 5312 and 5371. So you can trade accordingly.

Individual stocks:
Western India ship yard: Rs.15.07

Western India ship yard appears to have formed a head and shoulders pattern over a period of 20 months and appears to have just broken above the neck line and notice the volumes on break out which appear to be heavy. So currently the stock can be bought and the target for the same comes to around Rs.25-27 as per the pattern. As it has just broken above the neck line stop loss can be made on close below that neck line which happens to be around Rs.14.

Walchand Nagar Industries: Rs.230/-

Any break above 235 would enable the stock move out of consolidation for last six months and propel it towards 300 and if 300 is taken out we have chances of seeing 500 in quick time. It can be seen from the chart there is congestion moving averages and stock is just coming out of that and moving averages are opening up thus giving a clear indication that the stock might move to higher levels from current levels. Stop loss can be coolly put at 200 day EMA which happens to be Rs.201.
M.Sri Mahidar
Sunday 17th January 2010 Time 18.14 IST
Trend is Friend.

Lanco Infratech Limited - Trend reversal.

Lanco Infratech Limited Rs.54 appears to have broken the support line drawn from the lows of july begenning. The fall is also preceded by lowet top in the begenning of jan 10 indicating that the stock might has reversed trend and might still move further towards 48 and there after 42.
M.Sri Mahidar
Trend is friend.

Weekly technical update for week ended 9th January 2010

Nifty Technical update for week ended 9th January 2010:
Nifty opened on strong note above 5200 and there after moved above 5300, but did not sustain above it and there after started to slide slowly towards 5200 and finally closing at 5244. Except on Monday which was a positive day nifty formed dojis on next two days and there after on the following two days closed in negatively but for the whole week nifty closed positively. The movement in indices is giving a clear indication that when ever market is moving 1% up selling pressure is coming and when ever it fall 1% buying pressure is coming. So not we have to see how bulls are bears would react next week. As the market has took nearly three months to move above 5200 which was the huge resistance for 3 months and has sustained above it for the whole week proves that 5180-5200 would act as a huge support for the market if nifty slides further down sides in earlier part of the week. if 5180-5200 does not offer any resistance then it would be disaster for the market. So the 5180-5200 would offer good resistance in the coming week. Market is still trading above 15 day EMA which is at 5182 which clearly gives an indication that the short term trend of the market is up and any fall should be taken as an opportunity to go long. Any break of 15 day EMA would prompt us to reverse the strategy.

It can be seen from the above chart that nifty is moving in a pattern which I have been discussion for the last few months. So till this structure is sustained/respected then there should be no problem for bulls.
Shorter pattern for last two months is also indicated by blue lines in the chart which is within the bigger pattern. As per this we has support at 5180. According to this if nifty reaches 5180 we can expect a bounce. So be prepared for the same.


Positive for nifty:
• It is still at 15 day,50 day and above 100 day EMA
• RSI has once again moved above 50.
• DMI has given a buy signal – but DMI is moving up currently at 18 has to move above 20 to confirm the trend.
• OBV has once again moved above the trend line from may indicating that we might see a good upward movement in coming weeks.
• Daily MACD and TRIX are in buy mode
Negatives for nifty:
• Weekly MACD and TRIX have given sell signal.
• Huge –ve divergence between RSI on weekly
It can be seen from the above that –ve are decreasing and positives are increasing indicating that bullish sentiment is increasing in the market.

Elliotte wave analysis:
During the last few months I have indicated that as per Elliotte wave 5195 and 5520 are the crucial levels which are to be crossed and nifty has already crossed 5195 and is sustaining above it for last one week indicating that it would make an attempt at 5520 in coming weeks. So we have to watch out for the same in coming weeks. We may not be surprised if it is tested in this month only. Why I have come to the conclusion. As market is above to sustain above 5200 for one week has giving an indication that we should see a swift movement in nifty in coming weeks.

Point and figure charting.
Point and figure charting is one of the oldest forms of charting which takes into account only the price and not other thing. As per P&F price is king every thing is reflected in price. It does not take into account any other technical indicators like MAs,RSI,Etc., thus there are not divergences etc., which might confuse us. This only tells us where the buyers are and where sellers are and that who is winning. In the present case I have indicated in my intra week update that daily, weekly and monthly charts have given bullish breakout above the bearish resistance line which they failed to clear in last two years. So as Per P&F it clearly a bullish market till 5000 is respected. So till market is above 5000 there should be no problem for bulls and they should march on from current levels.

Directional Momentum Index:
DMI is indicating directionless for the market. This week the +D1 line is above the -D1 line and DMI is in neutral zone. During the week DMI has moved up and is currently placed at 18.22. The upward movement of DMI is indicating the bulls are slowly coming into the market. Only its movement above 20 would confirm the trend. So we have to see whether we would see DMI piercing 20 in coming week or not.

Pivot Point Trading Strategy:

During the last week nifty stayed above pivot for the whole week and has exceed the targets fixed by Pivot. For the coming week pivot is at 5240 which is very near to the current closing level of 5244. if it sustains above 5240 we would be seeing 5314 and after that 5383 and if it breaks 5240 we have to see 5171 and 5097.

M.Sri Mahidar
Sunday 10th January 2010 Time 16.50 IST
Trend is Friend.

Kirloskar Electric - Rs.84/-

Kirloskar electric is looking extremely good on charts

M.Sri Mahidar

Nifty update as per Point and figure

Nifty Technical Update as per Point and figure charing.
Nifty Update:
This update is being given as technically one good indication has happened which is very good news for years of bulls as per point and figure charting. Point and Figure (PF) charting is the oldest method of charting which clearly gives the shift of the market from bulls to bears and vice versa. One of the important aspects of PF is that it takes into account only the price and nothing else. Then you might be wondering why price only? As it is the only thing which is true in the market. The movement of price during the day, month or week would clearly indicate whether bulls are gaining upper hand or bears. PF captures only the fight between bulls and bears and this system gives very early signal of the market even ahead of other technical charts, like OHLC, Candle stick etc.,. I have been following the same for the last few months intraday, weekly and monthly and the results are seen to be believed. It gave very early signals of shift from bull to bear and also bear to bull.
Here below I would present the picture as per PF in daily, weekly and monthly.

Daily chart

In the above chart 3 box reversal is taken into account with each box 25 points.As per the daily chart above nifty has just broken above the “Triple Top” formation in PF parlance which is a very bullish signal this Triple top break out has happened once it moved above 5200. This is very bullish signal and it has very good upside potential and the price objective as per this break out works out to around 5800 levels. There for in my view the bulls are holding fort as of now and if 5200 is held successfully during this week I am of the opinion that the market might move very swiftly from current levels. So don’t be surprised if market moves up. In weekly and monthly charts also equally strong bullish break out has happened which are discussed below.
Weekly Chart:

In this chart also 3 box reversals is taken into account with each box 25 points. In this also nifty has broken above the “Triple Top formation” as per PF parlance. The pattern was formed over a period of three months. The” break out” out of the triple top formation is very bullish sign and we may not be surprised if the nifty zooms from the current levels. As I have indicated earlier PF give early signal of trend reversal, on weekly charts I has given the signs of bullishness building up in the market when it went above 5125 in second half of November and also when it went past 5125 in first week of December and it has confirmed the same by staying above it for whole of the month. Nifty has broken above what we call the “Bearish Resistance Line” (BRL) drawn at an angle of 45% from the top of January 2008. The break of the BRL market a significant event in the PF parlance, as the break of the same would indicate that the bulls are more stronger than any period after January 2008. So till the nifty trades above the bearish resistance line which appears to be at around 5000 levels there is not problem for bulls and I might not be surprised if market zooms from the current levels surprising every body.
Monthly Chart:

In monthly chart also we have taken 3 box reversal principles with each box consisting of 300 points. Hear also one of the bullish patterns Break out has happened. Nifty has broken above the “Double Top” (DT) pattern as per PF parlance. Break out of Double top pattern in monthly chart indicates a huge strength for the bulls in the last two years when ever double top or double top break out has happened nifty has on an average moved around 500 to 600 points. In this case the break out has happened on close above 5100 in the month of December 2009. And confirmed the same by staying above it thereafter. Here if history has to be considered nifty has to move by atleast 500 to 600 points from 5100 there for giving a minimum target of 5600 to 5700 for nifty. Another significant thing has happened along with the DT break out it has broken above the “Bearish Resistance Line”(BRL) which is shown clearly in the chart above. The break of the BRL indicates that bulls are at strongest point after January 2008. Till that BRL is not violated market might just zoom from the current levels. The BRL in monthly chart is also at 5000 levels.

The point and figure charting is giving different dimension for the market. In all the above cases it can be seen that PF has given early signs of reversal and we can be first into the market when every body is guessing on which direction the market would move. The PF charts are clearly indicating bulls are in full control of the market and any minor fall should be followed by huge rises. So as far as PF charting is considered its giving a bullish sign for the market when all the pointing towards doubts on the market.
Caution: once the “Bearish resistance” lines are taken out the trend would reverse. The BRL is at 5000 for both weekly and monthly charts. So till the market sustains above it no problem for bulls. Wait for weekly close of nifty below 5000 levels for trend reversal at this point of time.
So you know what to do now.

M.Sri Mahidar
Trend is friend
Wednesday, 6th January 2010, 17.34 IST

nifty and stocks

Inox leisure - Rs.66/-

Inox Leisure - Rs.66/-

Looking good technically. The stock has just broken out of a triangle. The triangle was formed over a period of 7 months. It formed a trianlge and broke out in the eight month (fibonacci) again. The break our was on huge volumes as indicated in the chart and also the DMI which indicates the strength of the move has moved to 18 from 15. Any move above 20 would confirm the trend. Techncially the stock appears to be a good buy. Stop Loss:Rs.57/-

Nifty weekly technical update for week ended 31st December 2009

Weekly technical Analysis for week ended 31st December 2009.
Wishing you all Happy and Prosperous New year 2010.

This week was truncated week; the direction of market was directionless. The movement of nifty during the week was limited to 60 points. One significant event taken during the week is that nifty was successful moving above 5200 and closing above it. Movement above and close above 5200 marks a significant event as it was not able to cross above it for the last two to three months. It closed above it only one day, it has to close above it for at-least 3 days to confirm the successful break out. The volumes on the last day of the week were on high indicating that the breakup might be successful. But the last day was the settlement day so the volumes cannot be believed so the coming week is going to be very crucial week as far as market is concerned as it is going to tell the where the market is going to headed for the next few weeks. But the break and close above 5200 cannot be taken as so easily as it marks the break above resistance level which the market failed to break above it at-least four times in the last three months. If it maintains above 5200 in the coming week then the market has chances of moving towards 5500 in very short term. As the market struggled to move above 5200 for the last three months the movement above it should make the market move very swiftly coming week. The swift movement of the market towards 5500 should confirm the successful breach of 5200. If the market does not move swiftly from the current levels then there is doubt in the breach of 5200. Considering all this the coming week is going to determine the status of the market for the short term.As long as 4950 is not violated we have not problem for bulls. The market is still trading above 15 day EMA which is at 5108, so as of now it indicates that trend is up and as long as nifty stays above it we should see for an opportunity to go long at every rise and if it is broken then the strategy should be reversed. The market has completed 10 months of continues rise, it has made a new high after 8th month also giving an indication that market has all the chances of moving up to the next Fibonacci i.e. 13, so the market should rise for another 3 months to complete the Fibonacci of 13 months. One point to be noted that there are the cases where the market have corrected in or after completion of eleventh month, the reason is not know but it has happened. So we have to be watchful in the coming month as it is the eleventh month. It may also be noted that market has historically corrected I a major way in January and February months, if you track the market then this phenomenon can be easily verified. All the investments should be made with straight stop loss as the market might reverse at any point of time.
Now the question arises, when any one would know when the market have reversed there is one simple technique which anybody can easily identify which is indicated below.
If you can see the chart below, market is continually making higher high and higher lows which is a clear indication that the market is in an uptrend. For the last two to three months even though market is not making a higher high it has been making higher lows which clearly indicating the market is finding support at lower levels. Whenever market is falling/correcting slightly, buying pressure is taking the market up. So once market makes a lower low then it would confirm that the trend has reversed. So we can hold on to our investments till the lower low is made. Currently the recent low is at 4943 so till the market trades above 4943 the trend is up. We should continually track the recent lows as the market progresses up and when ever recent low is taken out we can interpret that trend has reversed. I would be covering the same in my weekly update.

Elliott wave analysis: For the last two to three months I have been indicating that 5195 and 5520 are the crucial levels which have to be cleared. I have also indicated that 5195 is the crucial level to be broken an if it is broken then we have fairly good chances of nifty moving towards 5520 and any breach of the same has chances of taking market towards a new high. During the last nifty has successfully moved above 5195 and closed above it which is giving an indication that in a month or two nifty has chances of moving towards 5500 so be prepared for the same. But in any case 4943 should be closely watched.
Positives for Nifty:
• Nifty is above 15 day, 50 day and 100 day EMA
• RSI is above 50
• DMI has given a buy signal but it is still below 20, it has to move above 20 to confirm the strength of trend.
• Daily MACD is in buy mode and also above the trigger line.
• Market is forming higher highs and higher lows.
Negatives for nifty:
• OBV has broken the trend line
• Weekly MACD and TRIX are still in sell mode.
• -ve Divergence in RSI on weekly and daily charts.
• DMI is still not moving up
Directional Momentum index – (DMI)
DMI indicates the strength of the current trend whether up or down. Currently +D1 is moving up and the –D1 is flat and tilting down ward indicating the bears are losing ground and bulls are gaining strength. Now we have to see whether DMI is indicating strength or not. DMI is maintaining at 15 for the last two weeks even though the market was moving up, giving an indication that the bulls are not as strong as they appear to be. DMI has to start moving up and move above 20 to confirm the strength of the bears. So keep a close watch on the DMI which would indicate the strength of bulls in the current case.
Pivot Point Trading Strategy: Last week nifty has maintained above the pivot point indicating strength of the bulls but nifty has failed to move towards 5282. For the current week pivot is at 5194 if it maintains above that we have chances of moving towards 5229 and also 5256. it may be noted that monthly pivot is at 5122 so till it maintains above that we have chances of seeing nifty moving towards 5300 and 5400.

M.Sri Mahidar
Sunday 3rd January 2010, Time 19.24 IST
Trend is friend