To day the market opened on a strong note and also continued to move up and closing virtually at the top of the day but still below the high of the day. it may also be noted that whole during the day nifty did not move below the low of the yesterday indicating that the bulls are not prepared to take the market down and they appears to be strong atleast for the time being. So i may not be surprised if nifty moves up tomorrow also . Yesterday i have indicated that the 5th wave failure might have happend and we might see the market going down atleast for the time being but 5160 has to be broken in three days or so. i have also indicated that if the fourth wave forms into a flat then we might see the market moving up after touching 5200. it appers that from the chart that the second wave might be a zig-zag so the 4th wave might be a flat or a triangle so it appears to me that we might have compleated the 4th wave or in the process of compleating the same the compleation of the same would lead take the market up for the one last time to wards 5400 to 5500 levels and then corrects. what i have obsered technically is that generally market gives a false break out and then tanks taking every body with it. I have given both the altrenative-1 and also alternative-2. the wave count for alt-1 is given in red and for alt-2 is given in green. so just follow the market.

M.Sri Mahidar

Trend is friend.

Nifty has formed a lower low after sustained rise from 4675 indicating that the uptrend from 4675 have come to an end. it is Has also broken the trend line drawn from the low of january indictingh weakness. i have indicated in my nifty update on monday that we might at the end of the current rise and that as the 3rd wave is exteded we might see the 5th wave failure i.e. not exeeding the high of 3rd wave( 5th wave is shown by a circle in the above chart) and it seems that it has exactly done that. But it would be confirmed only on close below the low of 4th wave i.e.5160 it should be retraced in shorter period of time than that taken for the 5th wave preferably 50% to 60% of the time. The time taken by the 5th wave till now is around 5-6 days so we should move below 5160 in less than 5 days preferably in less that three days then it would confirm the end of the up move and we have chances of moving towards 5000 and 4700 so keep a watch on 5160 every very closely.
Another thing to be noted is that if the 4th wave is developing into a flat we might see nifty bouncing from around 5200 5150 levels towards 5350 and then fall very very fast. so we have to wait and see what unfolds.
M.Sri Mahidar
Trend is friend.

VIX - US has shown a sudden spike, and has moved from around 17 levesl to around 22 levels. It can be seen from the chart that the VIX has been refusing to go down below the 16 levels for last so many weeks. Even though the DOW was moving up VIX was refusing to go down. i have been wathching it from last two weeks closetly and during the later past of the week it has made a higher low even though the dow made a new year high thus signalling that the end might be near. It can also be seen from the chart the divergence of RSI and MACD which has propelled it to move further. The movement of VIX is clearly indicating that there is certain amont of fear in the market which is comming out when ever -ve new is comming, this can be seen by sudded spikes in the VIX in last 2 to 3 months. VIX has also made high high after forming a high low. so we might see it slowely inching upwards. so better watch out

in my april 14th post i have mentioned that we have two alternatives of elliote wave. And it appears that now alternative -1 is now unfolding please go through the link for the same
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh4DCHbOkRTstpsx3OWXCq9dZYxw0lYhTtKqnDU3ImtKCBveQ6Gf34uKIJu4RaEu8_lTAvVgY4yAmsvNpyztpMfHnqzZcubKoAGcyYDOcmpl3eUlqM_jou885KId4xh1oF4nvahgFOv9P5x/s1600/Picture1.png



the update of the same is provided below:

it appears that we might have compleated the wave 4 and have started the wave -5 which would be the final wave. i appears from the above the wave -1 was from 4675 to 4929 a rise of 254 points and wave-2 from 4929 to 4803 a fall of 126 points which is exactly fibonacci of 50% if wave-1. As the wave -1 appears to be truncated the wave-3 would generally be a elongated one and which give a minimum target of 1.618% of wave-1. In the present case it has risen from 4803 to 5399 a rise of 596 points which is near to the fibonacci of 238.10% of wave-1. and after that wave-4 is from 5399 to 5160 a fall 239 points which is nearly 40% near the fibonacci of 38.10%. Now we appear to be in the fifth and final wave. When wave-3 is elongated wave-5 would generally be a truncated wave means it would not move above the high made by the wave-3. so strightly speaking we should not see the 5th wave moving above 5399. But there are exeptions, fifth wave would have fibonacci relation ship with the third wave, it would 38.10%,50% or 61.8% of wave-3. So it should be of length 227,298 or 368 points So the probable targets are 5387,5458 or 5528. As wave-5 is elongated we migh not in any case see market move above 5528. But generally it would be of length 38.10% so the first target of 5387 appears to be the target. if it is taken out then we might see other targets. so wait and watch what the market unfolds.

M.Sri Mahidar

Trend is friend.

Weekly technical Analysis for week ended 24th April 2010.
Nifty opened on a weak note, made a low of 5160 and there after started to move up and virtually closed at the high point of the weak. The close of high point of the week is an indication that bulls might has gained upper hand and they might try to take the market higher during the coming week. In the weekly charts it has formed a bullish hammer which is giving an indication that that the bulls appears to be stronger and might try to take the market higher towards 5400 during the week. The coming week being the settlement week we might see some action during the first two days and after that it might just see market steady and there after main action would start on Friday after the settlement day.
As per the time series analysis, I have mentioned that markets have been raising for anywhere between 10 to 14 weeks and there after correcting for 3 to 5 weeks. But this time markets have risen for 9 weeks and in the subsequent week the markets have corrected and immediately in the following week indicating that the bulls are having strength. It is giving a indication that either the uptrend is not over and we might see the market move for another 2 weeks to complete 14 weeks. As the market has corrected for only one week instead of 3 to 5 weeks as in the previous corrections, this is against the normal phenomenon in this rise, giving an indication that we might see a blow off rally where in markets might move very swiftly probably in a vertical rise that too on heavy volumes. So we have to see what would transcribe for the markets.

This week I would be furnishing an interesting aspect on nifty which is Wolfe Wave (WW). It was developed by bill wolfe and has been in application for over decade and half. The interest feature of the Wolfe wave is that the accuracy rate is around 80-85% this has been indicated by the Wolfe wave practioners. One of the interesting feature of the WW is that it is it also give the target which has to be achieved. Wolf wave consists of a series of five waves and after that the market reverses its position and the its trend and achieves the target derived by the five wave. A trend line is drawn from start of the first wave through the end of the 4th wave which when further extended gives the probable target to be achieved. The remarkably the targets are met. The pattern to be effective the WW pattern should be tilted in the direction of the trend. WW can be applied for any time periods minute charts, hourly charts daily, weekly or monthly charts.
Nifty has formed a WW in the from May 2008 and completed the same at the low of the Lehman brother i.e at 2252 and gave at target of 5300-5500 and surprisingly we are nearly at that level. The WW is indicated in the chart below:
It can be seen from the above chart that the WW has formed over a period of six months and it has give a target line which gives a target of around 5300 to 5500 and remarkably see that till now we have not violated this target line. Three times it has failed to break above the trend line i.e the target line. And we can surely say that the target has been achieved. It can be seen from the above that the WW has been sloping down wards which strengthens the higher probability of the achievement of the target. One of the important aspects of the WW is that the 5th wave generally breaks the 1-3 trend line and generally is a blow off rally and it gives a indication that the trend line has been broken and break out has happened, this is where everybody is trapped and remarkably the market reverses its trend and you know what happens. You may be wondering why I have presented this here. There is a reason for this which would unfold as you proceed further.
You would be surprising to note that nifty now appears to be forming a WW in daily charts which has been shown in the chart below:

It can be seen from the above chart that we might be forming WW and we appears to be forming the fifth and final wave. It can be seen from the above that the WW pattern is slightly in the direction the trend i.e raising up which further strengthens the probability of achievability of the target. It can be seen from the above chart that WW pattern has been forming from middle of October and is still continuing, till now we have completed nearly 6 and half months and might take another one month or so for completion of the same.
It can be seen from the above chart that we might be forming the fifth and final wave of the WW pattern, the completion of the same the market might turn downwards. One of the peculiar feature of the 5th wave in WW as has been explained earlier is that it break above the 1-3 trend line which gives an indication of break out. In the present case as we are in the 5th wave we might in all probability see the 1-3 trend line being broken, the trend line currently appears to be around 5450 -5475 levels any break out above that would confirm the break out, out of the pattern and we might see in all the news papers or channels giving that the six months trend line has been broken we the market is headed upwards and probable new high. But if WW pattern is to be correct then we might not see a new high but we might see a new 52 week low. Once the price breaks out out of 1-3 trend line and then break below it would confirm the end of the WW and confirms the achievability of the target. so now the question arises as to what should be the probable target of 5th wave. Generally the 5th wave would be 127% to 162% of the wave -4. Wave-4 was from 5310 to 4675 a fall of 635 points so the length of the 5th wave should be any where between 806 points to 1028 points from 4675 so the target comes to anywhere between 5481 and 5703 so if nifty reaches this level then we should be carefull as market might turn at any point of time at these levels. We may see that once the 1-3 trend line is broken which would probably be broken in the coming month we might see everywhere in the media that six month trend line is broken indicates strength and we might see a new high or so but actually the reverse happens and we migh see a new 52 week low. So the break of the 1-3 trend line is a bull trap and most of the investors are caught in the trap as everybody would become overly bullish which generally results in market making a top. So in the coming month we might see the market rising very swiftly as we are nearing the completion of the 5th wave and which also happens to be final wave as per the elliotte. So if WW is to be believed we see further rise of around 300 points so be prepared for the same. As I have indicated the probability of the WW is 80-85% so we have all chances of achieving the target, which appears to be around 3900 for nifty.
Positives for Nifty:
· Market is above 200 day EMA.
· Market is above 50 day and 100 and 15 day EMA.
· Weekly MACD is in buy mode (about to give a sell again).
Negatives for nifty:
· Daily MACD has given a sell signal.
· Weekly MACD is about to give a sell signal.
· Weekly TRIX are still in sell mode.
Directional Momentum index – (DMI)
DMI is moving down and +D1 is about to move above–D1 indicating strength of bulls. As DMI is moving down it is indicating that bulls are not as strong as they appear to be.
M.Sri Mahidar
Sunday 25th April 2010, Time 19.15 IST
Trend is friend

Hourly chart

Weekly technical Analysis for week ended 17th April 2010.
Nifty opened on a week note and continued to slide whole through the week and closed at the lowest point of the week. All the days in the week, it has formed a black candles indicating that all through the week nifty has been sliding slowly. The point that nifty has closed at the lowest point of the week is an indicating that the bears are active during the week. One of the noticing feature of market during the week is that nifty has closed at two weeks low, this has happened for the first time after nearly nine weeks of rise. I have been indicating from the at-least two to three months that market might correct in April and it appears to be happening. As has been indicated in my earlier updates the market has completed 13 months of continues rise, are we are in the 14 month and generally markets correct after 13 months as 13 happens to be a Fibonacci. As I have been indicating that in the last 6 years of bull market, nifty has continually for more than 13 months only once and in all the remaining times they has risen for either 8 or 13 months. So as we have completed 13 months there are all fair chances of market correct and we have to see whether it materializes. As far as market it indicating that it is weak it has only to confirm the same.
As has been explained in the last weeks update under time series analysis, market has been raising for anywhere between 10 to 14 weeks. If you can seen my last weeks update, nifty has been rising in a decreasing trend first for 14 weeks, next rise was for 13 weeks and the subsequent rise was for 10 weeks and the current rise has risen for 9 weeks and in the 10th weeks it has corrected below the 2 week’s close. If you see the correcting first correction was for 5 weeks, subsequent falls were for 3 weeks and if you go by the trend nifty should at-least correct for 3 weeks so we should see at-least another two weeks of fall. So if time series is to be believed we should brace for at-least another two weeks of fall so be prepared for the same.

Positives for Nifty:
· Market is above 200 day EMA.
· Market is above 50 day and 100 day EMA.
· Weekly MACD is in buy mode ( about to give a sell again).
Negatives for nifty:
· Nifty has moved below 15 day EMA
· Daily MACD has given a sell signal.
· Weekly MACD is about to give a sell signal.
· Weekly TRIX are still in sell mode.
· RSI has started to move down after –ve divergence and presently placed at 50 indicating weakness.

Elliot wave analysis: there is nothing new to the mentioned than that is mentioned in my earlier update. In my earlier update I have indicated that the nifty might move towards 5420 or 5515 and nifty has just moved near the first target of 5420, it made a high of 5399. Nifty has failed to move above the first target, if wave structure( fifth wave of the fifth wave) has completed it has to be confirmed by faster retracement of the entire rise. so we should move below 4675 in shorter than 9 weeks preferably in 4-5 weeks then the it would confirm the completion of the uptrend. Till it is not breached the trend is up as per elliotte.
Directional Momentum index – (DMI)
DMI is moving down and +D1 is about to move below –D1 indicating weakness. If the early part of the week nifty moves down then –D1 would moved above +D1 signaling strength of the bears.

Pivot point analysis:

Nifty is below the weekly pivot for the first time after 9 weeks indicating weakness, if nifty stays below 5294 then we might see nifty moving towards 5205 and then 5149. If may also be noted that monthly pivot is at 5171 any break of the same should take the market towards 5013 so keep a close watch on the same.
M.Sri Mahidar
Sunday 18th April 2010, Time 19.01 IST
Trend is friend

Nifty Weekly Technical Update

Weekly technical Analysis for week ended 10th April 2010.
Nifty opened on a strong note moved higher and made a new 52 week high and touched 5399 a touch below 5400 and then corrected and moved below 5300 on Thursday and then recovered on Friday and closed finally at 5361. This is the first time after May 2008 that nifty has closed above 5300, thus clearly indicating that bulls are having strength. The first time closing above 5300 after nearly 21 months cannot be taken lightly. Even the volumes during the week were on higher side that that of the previous week. All this is pointing that bulls are firmly in control of the market and they are trying hard to take it higher. The only concern now is that nifty is now coming near the crucial long term resistance levels and we have to see whether nifty is able to take away these resistance levels. so keep a close watch on those levels. I have been mentioning the nifty has completed 13 months of continues rise and we might see market correcting from the current levels, it may be noted that it is not the necessary that the market should correct but historically in the current bull market from 2003 onwards only once market has continually for more that 13 months i.e. 21 months and remaining times it has corrected markets have corrected on completion of 8 or 13 months we have to see whether market corrects or it continues to move up we have to see.

Market Cycles:
This week I am furnishing another analysis which is known as time series analysis on the markets. This is known as market cycles. It is based on the premise that markets move in cycles and time periods and when ever there is chance on the time periods or rise or fall then there are probable change in the trend. It is clearly shown in the chart below; the chart furnished here is that of the nifty weekly chart. The left had side shows the bear phase for 2008 upto march 2009 and right hand side shows the bulls phase from March 2009 to date. The details of the same are explained below: It can be seen from the chart below that in the period from January 2008 nifty has been falling for around 10 to 11 weeks and the rises( corrections) were in the region of 5 weeks. It can be seen from the chart that nifty has been following this trend from January 2008 to October 2008. But the first reversal indication or the trend reversal can in January 2009 where in nifty has continually risen for 10 weeks. Please note till this time nifty was raising for only 5 weeks but in period after October low nifty has continually risen for 10 week, this is more than double the time taken for corrections till that time. So this is a clear indication that bulls have able to take the market up for 10 weeks and this the first sign of reversal of the trend. This generally should be confirmed by markets not moving below the lows or October 2008 and this is confirmed by market falling for 9 weeks and not making a new low. Till this time markets have been falling around 10 weeks and every time they were making a new low when ever they have falling for 10 weeks but this is the first time that markets have not made a new low when they have fallen for around 10 weeks so this the clear sign of weakness of the bears or strength of the bulls and this is the confirmation which is wanted by the market participants and you can see the results markets have been raising from that time onwards. So now if you want to see the indication or confirmation of the strength or other wise of the market now we have to see the time series analysis of the market for the current rise.
It can be seen from the chart above that right hand side shows the current bull run. It clearly shows the time periods for which it has risen and also for which it has corrected. It can be clearly seen from the above chart that too on the right hand side the market has risen for period of 14 weeks up to may 2009 and then for 13 weeks thereafter for 10 weeks and now it is completed 9 weeks. We have to seen whether the decreasing trend would be continued or would be broken. But the average period of rise is around 12 weeks from March 2009. So we might see the market moving towards completion of the average period or not. The corrections as can be seen from the above chart are in the range of 5 weeks and 3 week. First fall was for 5 weeks and for the next two times it has corrected for 3 weeks. So the average comes to around 3.5 weeks. One of the noticing feature of the current time period analysis is that in the first rise for 14 weeks nifty has been able to move substantially and for the next time for 13 weeks also nifty has been able to move above the may high substantially as the high of june was around 4700 and the next rise for 13 weeks it made a high of 5180, but the next rise of 10 weeks nifty even though made a high of around 5300 but it was not substantially high a difference of 100 points only. And if you consider the next rise which has now completed 9 weeks from low of 4675 has also not made substantially above the 5300 levels now also it has just moved around 100 points above the previous high of around 5300. Another point to be noted is that the last two rise of 10 and current 9 weeks the rise has take substantially higher time that the fall. The falls were for 3 weeks and the full retracement has take double the time, thus giving a clearly an indication that bulls are not as strong as they appear to be.
So it can be seen from the markets move in cycles and the time periods are also maintained. It appears to be surprising but it is the way the market behaves. It is astonishing that the time periods are adhered to in such a consistent manner. So whenever the market rises or falls these time periods are to be studied in detail. Whenever there is chance in behavior of the market and also there is change in time cycles then it clearly indicates that we might be nearing the turn of the market, it might be from bull to bear or bear to bull.
So now we have to see, whether the cycles are adhered to or not. Till the time periods are adhered to there is no problem to the ongoing trend and when they are not adhered to then it is a indication that the trend might be reversing. So now we have to seen for reversal the time periods for identification any reversal of the trend. Till now the time periods are being adhered to and once the down time period increases then it is a clear indication that the trend might have reversed that has also to be confirmed by lower top formation. So till the time periods are adhered to there should not be any problem for the current up move. So you can trade or invest accordingly.
Positives for Nifty:
· Market is above 200 day EMA.
· Market is above 15 day and 100 day EMA.
· Daily and weekly MACD is in buy mode.
· DMI is given buy signal but DMI has started to move up giving an indication that the bulls might be gaining upper hand.
Negatives for nifty:
· Weekly TRIX are still in sell mode.

Elliotte wave analysis:

There is nothing new to the mentioned than that is mentioned in my earlier update. In my earlier update I have indicated that the nifty might move towards 5420 or 5515 and nifty has just moved near the first target of 5420, it made a high of 5399 and now we have to see whether these would be attained or not.

Directional Momentum index – (DMI)
Currently the +D1 is above –D1 DMI is slightly moving up indicating the strength of the bulls. But the +D1 is moving down indicating that the bulls might be losing momentum which is being indicated –D1 raising. So we have to see whether bears would be successful in taking market down.

M.Sri Mahidar
Sunday 11th April 2010, Time 14.41 IST
Trend is friend

Prices of respective futures.

All the quotes are of futures:

Weekly technical Analysis for week ended 3rd April 2010.
Nifty opened on a strong note gone past 5300 made a high of 5329 and thereafter for the next two days it corrected made a low of 2534 and on Friday late recovery it recovered and finally closed at 5290. Nifty closed with a black candle during the week first time after seven weeks meaning that the close was lower that the week open indicating that the bears might has just sneaked into the market for very short term. The coming week would provide whether they are successful or not at least for the short term. Till nifty does not go below 5200 there is no problem for bulls. It may be noted that nifty has once again falied to close above 5300. Bulls have tried to take it above 5300 at least thrice in the last four months and they have failed all the three times. But whenever the 5300 is taken out we might see a healthy movement in nifty. But at this point of time it appears to be an uphill task for the bulls to take nifty above that. The break above 5300 should be on heavy volumes then only the break would be confirmed or other wise it might prove to be false break out. So we have to keep a close watch on the volumes. I have been seeing in all the news papers the FIIs have been continually buying the market but the volumes are continually decreasing as per charts, even this is baffling me. This is indicating that the FIIs might be putting the money in derivatives rather than cash market. After budget FIIs have pumped huge sums of money in the market after the budget but then also they are not able to take the market higher, it is still stuck at that level only. Nifty has been trading in this range from last six to seven months. So we have to seen where FIIs are investing as that might be a eye opener for us.
Nifty has completed 13 months of continues rise from low of 2539 on 6th of March 2009. So we might be cautious at higher levels during the coming month as generally markets corrected after completion of 13 months. As I have been saying from last two to three months that historically nifty has rose for a continually for more that 13 months only once so we have all fair chances of markets correcting in the coming month. Please do-not take a pre-emptive decision that the markets would correct, the market has yet to confirm the same. The market is showing weakness for last four to five months but still not confirmed the same till it confirms we have to be on long side or to be out of the market.

Nifty is forming a very interesting pattern which is indicated in the chart above. The pattern is know as “three fan principle”. Each line is known as fan.Mind you this is very very power full indicator, one of the peculiar feature of the pattern is that it forms in both bull and bear market. When it forms in bull market (raising) any breach of the third fan would signal the end of the uptrend and when in bear market the break of the third fan would signal the end of the down turn. As has been indicated this is very powerful indicator. I have seen previously also the pattern has given very good results. So we have to very very closely watch the third fan and breach of the third fan would signal of the end of the uptrend. The trend line at present appears to be 5100. So as on now till 5100 is not violated there should be no problem for bull and any breach of that level should be disastrous for the bulls. So keep a close watch on the third fan.
Positives for Nifty:
· Market is above 200 day EMA.
· Market is above 15 day and 100 day EMA.
· Daily and weekly 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 TRIX are still in sell mode.
Elliotte wave analysis: there is nothing new to the mentioned than that is mentioned in last week.
Directional Momentum index – (DMI)
Currently the +D1 is above –D1 DMI is slightly moving up indicating the strength of the bulls. But the +D1 is moving down indicating that the bulls might be losing momentum. So we have to see whether bears would be successful in taking market down.
Pivot Point Analysis:

Nifty is just above the pivot any break of the same on down side would take it to 5240 and 5191. But if it stays above that then we can see it moving towards 5400.

M.Sri Mahidar
Saturday 3rd April 2010, Time 21.41 IST
Trend is friend