Flow Technique for 30th march 2010. - Prices future only.

Nifty weekly technical update with detail elliotte analysis

Weekly technical Analysis for week ended 27th March 2010.
Nifty during the week was on a positive note except on Monday, nifty opened on a weak note and there after continued to move up during the balance part of the week. Nifty is now placed just below the 52 week high which happens to be at 5310, now the closing price is at 5282. For the short term the market now appears to be at in a uptrend so whatever may be our institution we should try to follow the trend rather than to go against the trend. If Nifty decisively closes above the January high then we can see it moving towards 5450 and next target should be 4600. But it should decisively close above the 5310, it would be better if it closes above that level for three consecutive days. So the coming week is going to be very important for the market as it is going to take the market to the new horizon or we should go to the 5000 levels. Technically the markets seems to be in over bought zone which indicates that we have chances of markets correcting before it raises, but historically there are cases where in markets have stayed in over bought zone for considerable long period of time. So till the markets give a reversal signal its better to stick with the trend even though the markets in giving an indications of reversal. It better to stick to the trend. As has been indicated by me in my last week’s update, we have completed 12 months and are now into 13 weeks and generally markets have corrected when they have completed Fibonacci time period of 13, I have indicated in my last week’s update historically markets have risen continually for more than 13 months only one time in the last seven weeks and in all the cases it has been 8 months or 13 months. So considering this we might have chances of market moving down after completion of the same. market has started to rise from 2539 formed on 6th of March 2009 and we would be completing 13 months on 5th of April 2010 so we have still one weeks left for the market to make an upward attempt. So we have chances of market making a top in April and then starting correction at any time between 6th of April and 6th of May 2010. So keep a close watch on this time period. For the short period of time the market is in a uptrend so until it turns down try to go long only.

Positives for Nifty:

· Market is above 200 day EMA.
· Market is above 15 day and 100 day EMA.
· Daily MACD is in buy mode.
· DMI is given buy signal but DMI is virtually flat during all the rise indicating that bulls are not as strong as they are ought to be.
Negatives for nifty:
· Weekly MACD and TRIX are still in sell mode.

There is another interesting development technically which I have observed whole during the current rise. The advance decline line popularly known as A/D Line which is arrived at by dividing no of advancing stocks by number of declining stocks. Generally when the markets rise the advancing stocks will be more than the declining stocks and A/D line rises and when the markets fall the declining stocks would be more that the advancing stocks and A/D lines would start falling. Any divergence in the same would give an indication that the turn of the market is near and the trend is expected to turn.

It can be seen from the above chart that the while nifty is raising the A/D line is falling indicating that the rise is associated with fall in A/D line. The fall in A/D line indicating that the number of stocks decreasing is more that the number of stocks rising. It can be seen from the chart above that A/D line is at nearly six months low while nifty is going to make a new 52 week high. This divergence is one of the powerful indicators of reversal. This is indicating that all is now well with the market. The chart is clearly indicating that the declining stocks are more than the advancing stocks which clearly giving an indicating that the rise is not broad based. This is clearly indicating that the market reversal is near, but it is yet to confirm. Till it confirms we should see for going long that short.
Elliott wave analysis: in detail:
Till now I have been providing the Elliott wave analysis only explanation without any chart analysis. This week I am furnishing the Elliott count from the bottom of 2539. As the market is defying all the technical’s I have decided to go deep into the Elliott wave analysis, which generally give a clear picture in uncertain market and true to its nature Elliott has provided me the clear picture of the current state of the market and also the probable targets. The details Elliott count of the current rise is provided below in the chart.

It can be seen from the above chart which clearly showing the probable elliotte wave count from the low of 2539 as on 6th of March 2009. As per elliotte wave count furnished above we seem to be in the last and final wave of the current up move the completion of the same. Now I would provide the detailed analysis of the Elliott count.
Wave – 1 ( in the present case it appears that the wave-1 is the extended wave and all the projection is arrived taking that into account.)
Wave – I from 2539 to 4673 a rise of 2154 points in 14 weeks ( note market corrected after 13 weeks)
Wave-2 from 4673 to 3974 a fall of 719 points and took 4 weeks( note just after Fibonacci of 3), which is 33% of the wave-1 which is near the Fibonacci of 38.10( when wave-1 is extended wave -2 would be less than 38.10% and to prove it true nifty has corrected only 33%)- the pattern formed for the corrective wave is a zig-zag.
Wave-3 from 3974 to 5181 a rise of 1207 points and it again took 14 weeks (note again corrected after Fibonacci of 13). If Wave-1 is extended wave-3 should not be more than 61.8% of the wave-1. In the present case it is 56.08% justifying my assumption of the extended 1st wave
Wave-4 is from 5181 to 4675 a fall of 506 points and took 17 weeks (which is not a Fibonacci very rare).As per alternation theory of Elliott wave-2 and wave-4 should alternate means they should not be the same. Considering this, the wave-2 wave a zigzag so the wave -4 should either be a flat or a triangle. In the present case its I a flat and it happens to be irregular flat.
Wave – 5 now it appears that the wave -5 has started from 4675 and not placed at 5282 a rise of 607 points.
Now question comes what would be the probable target which the 5th wave would achieve or expected to achieve. One of the things which should be noted is that 3rd wave would never be the shortest wave so wave-5 would not be longer than wave-3 so in any case it would not be longer than 1200 points so the maximum target should be 5875( not more than that in any case in this assumption). Generally historically it has not been the case. If the wave-1 is extended then the wave -5 would be generally be either 38.10% or 61.8% of the wave -3 so the wave-5 should be of length 460 points or 746 points from 4675. So the target should be 5134 and 5420. The market has gone above the 5134 so now the next target should be 5420.
Another case to be observed is that if the wave-1is extended there is all a possibility that the whole advance should terminate at 38.20% above the 1st wave. In the present case the first wave is of length 2154 points and has ended at 4693. So the 38.20% of wave-1 works out to 820 points. So the there is all probability that the whole advance should terminate at 820 points added to 4693 so the target comes to 5513. So it appears that the 5th wave which is in progress has all the probability of completion at 5513 which is nearly 200 points away from the present levels.
As far as Elliotte wave analysis is considered we can seem nifty inching towards 5420 or 5513. So better watch out at those levels. You may also note that the coming week we might be completing 13 months and we are also in the fifth wave so we have all the chances of market reversing. Another point to be noted is that the 5th wave has completed 6 or 7 weeks now so we are also nearing or entering the Fibonacci week of 8 so all these are converging pointing towards probable reversal.
Now we would see what the breakup of the 5th and final wave (Probable).

I have given the breakup of the 5th wave in the above chart. It appears that we are in the 3rd wave of the 5th wave and after that we would be seeing the 4th wave which has chances of ending at around 5200 and there after the fifth and final wave of the fifth wave would start and has chances of progression towards 5500 where the wave is expected to end.
In the above chart it appears that the 3rd wave is the extended wave so there are all possible chances of it being a failure if not it has all the possible chances of attaining 61.80% of wave -3. In the present case
Wave- 1 was from 4675 to 4929 a rise of 254 points
Wave-2 from 4929 to 4805 a fall of 124 points which is nearly 50% (again a Fibonacci) of the wave-1.
Wave-3 as it is extended its minimum target should be 161.8% of the wave-1, so the minimum target of wave-3 should be 410 points from 4805 and it comes to 5215 and it seems that we have already achieved the same. So we might be progressing towards the next Fibonacci which happens to be 2.618 for that the target comes to 5469. So now we might see the wave-3 ending any where between 5300 and 5469 after which wave -4 would develop
Wave-4 has not yet started and it expected to end at around 5200 to 5250 levels and there after wave -5 would commence.
Wave -5 is expected to commence from around 5200-5250 levels and raise around 250 points from the end of wave-4.
So we are in formation of the final two wave of the entire wave structure in my view it is expected to last around two weeks and there after we might see the market falling. In the present case I am assuming that the 5th wave might be a failure, as it would enable the faster retracement of the rise.
Elliott has clearly provided me the probable target and also the probable structure of the market in the present case. Which is at-least giving an indication to be carefull with the market as the market is about to make a medium term top which might not be breached in the current year. I am also planning to prepare a detailed analysis of the nifty as per Elliott and would also be proving the probable structure of the market in the next few years and also highs or lows which it is expected to achieve.

Hope it might have given you the clear picture in the present case of uncertainity.

M.Sri Mahidar
Sunday 29th March 2010, Time 10.49 IST
Trend is friend

Flow for 26th March 2010 - Prices are of future.

Flow Technique trading for 25th March. the prices are of futures.

Flow Technique - Prices of Futures only.

Weekly technical Analysis for week ended 20th March 2010.
Nifty has been rising continually for whole of the week. All the days in the week it closed on a positive note, and closed at virtually at the highest point of the week clearly indicating that the bulls might have taken upper hand whole through the week. There is no doubt that the market is in a uptrend at-least for the short term. But there are so many things which are pointing towards a probable correction is near the corner. You may be thinking that I am a bear and is favor of the bear market its not the case I am only presenting the pictures are has been pointed by the technicals. As per the Fibonacci time periods considering the markets has started to raise after the march 2009 low of 2539 we have now completed 12 months have entered into 13th month which might be over in another 10 to 15 days. I have been pointing form the last five months that we might start correction from end of march 2010 and we are just at the door way of the same. Generally markets correction on completion of 13 months or at the end of the 13 months. Its not that we should correct but we have all the fair chances of correcting the same. Now we come to historical, if you consider the bull market from may 2003 onwards ie. Virtually for the last 7 years markets have rise for more that 13 months only once and that too was for 21 months. On the remaining occasions it has risen for either 8 months or 13 months so considering the historical also we have fair chances of correcting after this month or the correction might be two to three weeks away. The next month is going to be very crucial one as if the market continues to rise even during the coming month also the we can be sure that we might be raising for the at-least whole of the year. So historical Fibonacci time period is also pointing towards probable correction. Unless and other wise we close above the resistance line shown in the chart below we have all the fair chances of correcting from the current levels.

If you can see the above chart nifty is just near the resistance line drawn from the lows of may 2009, nifty has taken support of the line from may onwards and in January it has broke below that and now it has would act as resistance for any up move. I have been pointing from the last January onwards that nifty might rise and find resistance line and then might fall very very violently; this is the perfect technical pattern. Also notice the volumes at top during the last three days the volumes are heavy compared to that of the break out. Technically speaking the volumes at the top are a danger signal as this points out to probable distribution and generally a big correction sets in after the volumes increase at the top. It can be seen from the chart above indicated by yellow circles where ever the volumes were high at the top the markets have corrected heavily. Whether this time also the phenomenon would repeat we have to wait and see. So longs be careful. Technically shorts can be taken at these levels with a stop loss at around 5325 levels.

Another point to be taken into account is, as has been shown by chart above is that nifty has taken three weeks to fall from 5300 to around 4675 levels and it has till now taken 6 weeks to rise but till now has not been able to move past the top. The retracement of the fall has taken more period indicating clearly that bulls are trying the market to take up but have till now failed to take the market up. If you see the current rise from march 2009 onwards when ever nifty has fallen the retracement has taken less time than the fall and this was confirming that the uptrend is intake but from the November onwards the retracement of the fall has taken more time than the fall. And whenever market has risen from November onwards the fall has taken far less time than the rise this clearly indicating that the bears have slowly come into the market and till this phenomenon is reversed we might now see the market rising with a vengeance. So this is also pointing towards probable correction in offering or that we might be in this range for some period to come. Another point to be considered is that if the from November 2009 as the market have taken far less time to fall that the rise and if the market corrects we might see markets correcting very violently and might take far lesser time that the rise of 6 weeks. If this happens this would clearly confirm that the bears have gained upper hand and further downsides are not ruled out.
Positives for Nifty:
• Market is above 200 day EMA.
• Market is above 15 day and 100 day EMA.
• Daily MACD is in buy mode.
• DMI is given buy signal during the week indicating strength of bulls but DMI is moving indicating that bulls are not as strong as they are ought to be.
Negatives for nifty:
• Weekly MACD and TRIX are still in sell mode.
Elliotte 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. If we seen historically nifty has corrected anywhere between 50 to 61.8% when the nifty has corrected after substantial rise. so the total rise of nifty is around 2800 points so we might see a fall of either 1400 points or 1730 points thus giving a target of 3900 and 3500 so we have still a way to go before market reverses.
Directional Momentum index – (DMI)
Current +D1 has moved above –D1 indicating that bulls might has slowly coming into the market and they are refusing to go down DMI has also started to move up indicating that bulls have gained upper hand and that further upsides are not ruled out. DMI is above 30 indicating that the bulls are having strength.

Pivot Point Analysis:

Currently the pivot for the next week is placed at 5211, till nifty is above that level we have chances of seeing 5300 and also around 5400. If nifty goes below 5211 we might see 5152 and 5043. One of the point to be noted is that current years pivot is placed at 5082 and any move below 5082 has chances of seeing big correction where we can see nifty moving towards 4700 or 4500. So we have to keep close watch at 5082 as far as pivot is considered.
M.Sri Mahidar
Sunday 21st March 2010, Time 20.19 IST
Trend is friend

Trade for 19th March 2010.( Prices of Futures)

Flow technique for 18.03.2009 - Prices of Futures

Flow for 16th March

HDFC

flow

Grasim

Lanco Innfratech Limited

Tata steel

The figurs are of Future prices of each stock

Flow technique

All the Prices are of Futures:

infosys

Larsen and toubro

Nifty Weekly technical update

Weekly technical Analysis for week ended 6th March 2010.
Nifty opened on a strong note and stayed strong throughout the week. Nifty virtually closed at highest point during the week indicating that the bulls strong at-least for the short term. One of the positive features of the current move is that the break out( on budget day) was on high volumes the following rises were also on high volumes indicating that the rise might be on genuine. One of the noticing features of the current move is that nifty has successfully closed above the 100 day EMA which is clearly giving an indication that the bulls are in strength as of now. It has also moved above the 50 day EMA and also 15 day EMA has moved above 100 day EMA and is in process of moving above 50 day EMA indicating that bulls are gaining strength. So as far are technical’s are considered it appears that bulls appears to have gained upper hand and would try all means to take it forward as not it is nearing the resistance zone near 5180-200 levels where the trend line from the May 09 lows is there. So we can expect that trend line to offer good amount of resistance on upper side movement of market. If it is taken over then we can see the market towards 52 week high. So just wait and watch.

Market has moved above the 61.8% of the total fall from 5300 to 4675, giving an indication that nifty might attempt at 80% retracement which happens to be at 5180. One of the points to be noted here is that except in January 2010 nifty has faced considerable resistance at 5180 levels and currently the resistance is also placed at 5183 so this is the levels which might offer very very good resistance.

Positives for Nifty:
• Market is above 200 day EMA.
• Market is above 15 day and 100 day EMA.
• Daily MACD is in buy mode.
• DMI is given buy signal during the week indicating strength of bulls but DMI is moving indicating that bulls are not as strong as they are ought to be.
Negatives for nifty:
• Nifty is below 50 day EMA
• Weekly MACD and TRIX are still in sell mode.
Elliotte wave
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. If we seen historically nifty has corrected anywhere between 50 to 61.8% when the nifty has corrected after substantial rise. so the total rise of nifty is around 2800 points so we might see a fall of either 1400 points or 1730 points thus giving a target of 3900 and 3500 so we have still a way to go before market reverses.
Directional Momentum index – (DMI)
Current +D1 has moved above –D1 indicating that bulls might has slowly coming into the market and they are refusing to go down but the DMI which shows the strength of the trend is moving down indicating that they are not as strong as of now as they appears to be.
Pivot Point Trading Strategy
Weekly pivot placed at 5047 and if nifty maintains above that we have chances of seeing 5159 and 5230 if it moved below 5047 then we have chances of seeing 4976 and 4864. So trade accordingly.
M.Sri Mahidar
Sunday 7th March 2010, Time 19.32 IST
Trend is friend

Flow as on 4.03.2010