Thursday, July 29, 2010
Sunday, July 25, 2010
Weekly technical Analysis for week ended 24th July 2010.
Nifty surprised every body and moved up to make a new high and also close at the new high of 2010 and also 52 week high. The movement during the nifty has surprised every body and also it successfully conquered 5400 which it was unable to do it for the last one year onwards. The break out and close above 5400 would give a new horizon for the nifty and has further chances of moving up. We have to see in the coming weeks whether the bulls would be able to maintain nifty above 5400. Till nifty stays above 5400 we have chances of seeing further highs for the market. So be braced for further ups if 5400 is held during these weeks. We have been discussing for last so many months that nifty has been moving in a band of 4700 to 5400 and whether this move above 5400 has broken above the trading channel? You will be surprised to know that nifty has still not broken out of the trading barrier. In the daily charts it has not still broken above the sloping trend line drawn from the previous two tops and it has to move above 5550-5600 to break above this. So we have to still move some ground to cover to clearly break out of the trading range. We have been seeing from the last one week is that nifty is in a range and has been forming higher highs and also higher lows. So still this trend is maintained, the up trend is intact and further upsides are not possible. So bulls would rule till this higher lows are maintained.
We have been discussing about time series analysis for last so many months and it has been clearly indicated that every rise is for nine weeks to 10 weeks and the every fall is for 5 weeks except for one is may fall. And by the end of this week we have completed 9 weeks so as per time series analysis either we stay here for one week or we have to correct from here which should continue for at-least 5 weeks. Whether we correct or rise no body can tell. One theory which is favoring the time series analysis, I have been mentioning that market has falling very fast and the rises have taken more time to recover the fall, i.e the markets have fallen for 5 weeks and it has taken 8-9 weeks to recover the entire rise, till this trend is maintained nifty is not going to break away from this range and we would be still in this range even if market moves slightly up. This means that till the fall is not retraced in shorter time preferably in less that half the time, we would be in this trading range only. The higher time taken to retrace the fall is giving a clear indication that bulls lack strength at present time even though they are indicating strength. This is might be puzzling you but if technicals are to be believed its true. Now you might get a doubt that what if the market breaks out of the trading range. As far are technicals are concerned and also time series analysis even if the markets break away from the trading range the upsides should be limited and we have all possible chances of markets correcting heavily if the market break away from the trading range and again come back to the trading range. One thing is sure if we break away from the trading range we can see a blow off rally as seen in the end of 2007.
You might be wondering that whether I am a perennial bear, not it’s not the case I am only trying to interpret the markets technically and most of the time the technicals are right. They are wrong only twice one at the top and another at the bottom. So we have to seen what happens.
Another point which is pointing towards the upward movement of the market is that the break above 5400 was on negative divergences of oscillators. Generally new high should normally and not –ve divergences.
Now we come to elliotte wave time periods. We have made a new high in the 17th month, and if we apply the time period analysis as per elliotte. We should see for Fibonacci immediately following the period of high and the next immediate Fibonacci comes to be 21. So we have chances of seeing markets trading in this range only for next three to four months. Which happens to be around 16 weeks. So considering this we have chances of seeing the markets in this trading range only for the next 4 months or sixteen weeks. You might be wondering if we have made a new high then we should continue to move up. But as for elliotte wave also the last wave should be retraced in faster time period, and till now this has not happened thus indicating that we might not run away from the current level. And if we consider 16 weeks, then we have all possible chances of one fall of 5-6 weeks and also one rise of 9-10 weeks whether we will see one fall and one rise, as per time period analysis of elliotte wave we have all fair chances of seeing it. That means we have all possible chances of markets falling that then raising. Whether this is possible, technically it appears to be so. We have to see it differently when market itself behaves differently till that time one fall and rise are not ruled out. I did not have the time to work out the elliotte analysis after the new high. I would try to work it by next week.
Nifty surprised every body and moved up to make a new high and also close at the new high of 2010 and also 52 week high. The movement during the nifty has surprised every body and also it successfully conquered 5400 which it was unable to do it for the last one year onwards. The break out and close above 5400 would give a new horizon for the nifty and has further chances of moving up. We have to see in the coming weeks whether the bulls would be able to maintain nifty above 5400. Till nifty stays above 5400 we have chances of seeing further highs for the market. So be braced for further ups if 5400 is held during these weeks. We have been discussing for last so many months that nifty has been moving in a band of 4700 to 5400 and whether this move above 5400 has broken above the trading channel? You will be surprised to know that nifty has still not broken out of the trading barrier. In the daily charts it has not still broken above the sloping trend line drawn from the previous two tops and it has to move above 5550-5600 to break above this. So we have to still move some ground to cover to clearly break out of the trading range. We have been seeing from the last one week is that nifty is in a range and has been forming higher highs and also higher lows. So still this trend is maintained, the up trend is intact and further upsides are not possible. So bulls would rule till this higher lows are maintained.
We have been discussing about time series analysis for last so many months and it has been clearly indicated that every rise is for nine weeks to 10 weeks and the every fall is for 5 weeks except for one is may fall. And by the end of this week we have completed 9 weeks so as per time series analysis either we stay here for one week or we have to correct from here which should continue for at-least 5 weeks. Whether we correct or rise no body can tell. One theory which is favoring the time series analysis, I have been mentioning that market has falling very fast and the rises have taken more time to recover the fall, i.e the markets have fallen for 5 weeks and it has taken 8-9 weeks to recover the entire rise, till this trend is maintained nifty is not going to break away from this range and we would be still in this range even if market moves slightly up. This means that till the fall is not retraced in shorter time preferably in less that half the time, we would be in this trading range only. The higher time taken to retrace the fall is giving a clear indication that bulls lack strength at present time even though they are indicating strength. This is might be puzzling you but if technicals are to be believed its true. Now you might get a doubt that what if the market breaks out of the trading range. As far are technicals are concerned and also time series analysis even if the markets break away from the trading range the upsides should be limited and we have all possible chances of markets correcting heavily if the market break away from the trading range and again come back to the trading range. One thing is sure if we break away from the trading range we can see a blow off rally as seen in the end of 2007.
You might be wondering that whether I am a perennial bear, not it’s not the case I am only trying to interpret the markets technically and most of the time the technicals are right. They are wrong only twice one at the top and another at the bottom. So we have to seen what happens.
Another point which is pointing towards the upward movement of the market is that the break above 5400 was on negative divergences of oscillators. Generally new high should normally and not –ve divergences.
Now we come to elliotte wave time periods. We have made a new high in the 17th month, and if we apply the time period analysis as per elliotte. We should see for Fibonacci immediately following the period of high and the next immediate Fibonacci comes to be 21. So we have chances of seeing markets trading in this range only for next three to four months. Which happens to be around 16 weeks. So considering this we have chances of seeing the markets in this trading range only for the next 4 months or sixteen weeks. You might be wondering if we have made a new high then we should continue to move up. But as for elliotte wave also the last wave should be retraced in faster time period, and till now this has not happened thus indicating that we might not run away from the current level. And if we consider 16 weeks, then we have all possible chances of one fall of 5-6 weeks and also one rise of 9-10 weeks whether we will see one fall and one rise, as per time period analysis of elliotte wave we have all fair chances of seeing it. That means we have all possible chances of markets falling that then raising. Whether this is possible, technically it appears to be so. We have to see it differently when market itself behaves differently till that time one fall and rise are not ruled out. I did not have the time to work out the elliotte analysis after the new high. I would try to work it by next week.
It can be seen from the above chart that we are still in the trading range, indicated by the black back ground and we can clearly see –ve divergences at the top twice at the top. Whether the –ve divergence would translate into fall surely but when only markets can tell. So till 5400 is held no problem for bulls.
Positives for Nifty:
§ Market is above 200 day EMA.
§ Market has moved 50 day or 100 day EMA.
§ Market has moved 50 day or 100 day EMA.
§ DMI has moved above 20 indicating strength of bulls.
Negatives for nifty:
§ The rise is on –ve divergences with MACD histogram and also RSI.
Elliott wave:
In Feb-March I have indicated in my Elliott study that it would be difficult nifty to move above 5415 and 5585 and now one is violated and we have see whether the second one would be violated. Wait and watch
Directional Momentum index – (DMI)
Currently +D1 is above –D1 and +D1 flat indicating that bulls are at least having control of the market. As has been indicated earlier DMI has moved above 20 and is moving up indicating the strength of the bulls and till the DMI move up along with rise in market we might see a blow off rally. If DMI moved down then we can see market drifting down. In the last one years along with the rise when ever DMI has moved to 25 to 30 levels the trend has reversed whether this would happen now also we have to wait and see. This week DMI has moved from 25 to 28 indicating that bulls are gaining upper hand.
M.Sri Mahidar
Sunday 25th July 2010, Time 20.30 IST
Trend is friend
Sunday, July 18, 2010
Weekly technical Analysis for week ended 18th July 2010.
Nifty opened positively during the week and there after moved in a narrow range of 100 points only and closed at 5393. One of the noticing features of the current move is that nifty has made a new 52 week high. Nifty has successfully moved above 5400 which was a formidable resistance for last at-least six months. One of the noticing features is that it was not able to sustain above 5400 and did not close single day above 5400. Even though it moved above the resistance level of 5400 it failed to sustain above it is giving a clear indication that 5400 still offers a formidable resistance and weekly close above it is required for the market to run away from band of 4800-5400 which it was moving for the last one year. One of the noticing feature which is developing is that DMI has moved above 20 and is presently placed at 24 and is moving up giving an indication that further upside movement is not ruled out. So the upward movement of DMI along with +D1 is giving an indication that bulls are slowly but steadily coming into the market. So if DMI continues to move up along with rise in price then we might see a blow off movement in nifty which has been in narrow range for last one year. another positives which has developed over last two weeks is that Weekly MACD which was in sell move has given a buy move and we have to see whether market sustains or again it moves down to give sell signal.
It may also be noted that as per candle and stick parlance, it has formed an inverted hammer which is an indication that even though market has moved up during the week bears are showing strength and as per this if the last weeks high is not take out we might see market drifting slowly down wards.
It may be noted that nifty has been moving up for 9-10 weeks and there after falling for 5 weeks for last one year and it appears that the pattern is still being followed. I have been indicating about the time series analysis for past few months and nifty has been correctly following then and we were able to identify the time periods during which the markets might reverse. As has been indicated by me, the entire fall of April and May has take 6 weeks and also the rise from may end till now has consumed 6 weeks and markets were not able to make a new high, which is clearly indicating that market is taking longer time to move up and shorter time to fall. Till this phenomenon exists we can be sure that market would not rise away from the current levels. I have also indicated that market for the last one year would rise for 6 weeks and would spend the next 3 weeks in 100 point range there by raising for total 9 weeks and then fall like pack of nine cards for five weeks. By the current weeks we have completed 8 weeks of rise and if the trend is to be followed we should rise for next one week or so and there after we should fall for another 5 weeks at least.
It can be seen from the chart below that nifty has been moving in up or down in channels red trend lines are the channels of each rise. There have been three earlier rises and they has moved in channels and when ever it has broken the support line the markets have corrected for 5 weeks. The current rise is also moving in the channel and is above the support line indicated by blue circle and till it is above this support line then we have all the fair chances of market correcting for 5 weeks so keep a close watch on the support ling the moment it is broken we can just reverse our position.
It can also be seen from the above chart that nifty the blue line indicated by arrow is the one year trend line and it is also one of the formidable support line and it was broken only once in last one year. This along with the above support line are placed at around 5350 so any close below that would end of the current up move and we have to brace our selves to movement up to at-least 4900 levels.
Positives for Nifty:
Market is above 200 day EMA.
Market has moved 50 day or 100 day EMA.
Market has moved 50 day or 100 day EMA.
DMI has moved above 20 indicating strength of bulls.
Negatives for nifty:
Elliott wave:
In Feb-March I have indicated in my Elliott study that it would be difficult nifty to move above 5415 and 5585 and till now both these have not be violated on closing basis so I would furnish the alternative structure if these are violated.
Directional Momentum index – (DMI)
Currently +D1 is above –D1 and +D1 flat indicating that bulls are at least having control of the market. As has been indicated earlier DMI has moved above 20 and is moving up indicating the strength of the bulls and till the DMI move up along with rise in market we might see a blow off rally. If DMI moved down then we can see market drifting down. In the last one years along with the rise when ever DMI has moved to 25 to 30 levels the trend has reversed whether this would happen now also we have to wait and see.
M.Sri Mahidar
Sunday 18th July 2010, Time 18.19 IST
Trend is friend
Nifty opened positively during the week and there after moved in a narrow range of 100 points only and closed at 5393. One of the noticing features of the current move is that nifty has made a new 52 week high. Nifty has successfully moved above 5400 which was a formidable resistance for last at-least six months. One of the noticing features is that it was not able to sustain above 5400 and did not close single day above 5400. Even though it moved above the resistance level of 5400 it failed to sustain above it is giving a clear indication that 5400 still offers a formidable resistance and weekly close above it is required for the market to run away from band of 4800-5400 which it was moving for the last one year. One of the noticing feature which is developing is that DMI has moved above 20 and is presently placed at 24 and is moving up giving an indication that further upside movement is not ruled out. So the upward movement of DMI along with +D1 is giving an indication that bulls are slowly but steadily coming into the market. So if DMI continues to move up along with rise in price then we might see a blow off movement in nifty which has been in narrow range for last one year. another positives which has developed over last two weeks is that Weekly MACD which was in sell move has given a buy move and we have to see whether market sustains or again it moves down to give sell signal.
It may also be noted that as per candle and stick parlance, it has formed an inverted hammer which is an indication that even though market has moved up during the week bears are showing strength and as per this if the last weeks high is not take out we might see market drifting slowly down wards.
It may be noted that nifty has been moving up for 9-10 weeks and there after falling for 5 weeks for last one year and it appears that the pattern is still being followed. I have been indicating about the time series analysis for past few months and nifty has been correctly following then and we were able to identify the time periods during which the markets might reverse. As has been indicated by me, the entire fall of April and May has take 6 weeks and also the rise from may end till now has consumed 6 weeks and markets were not able to make a new high, which is clearly indicating that market is taking longer time to move up and shorter time to fall. Till this phenomenon exists we can be sure that market would not rise away from the current levels. I have also indicated that market for the last one year would rise for 6 weeks and would spend the next 3 weeks in 100 point range there by raising for total 9 weeks and then fall like pack of nine cards for five weeks. By the current weeks we have completed 8 weeks of rise and if the trend is to be followed we should rise for next one week or so and there after we should fall for another 5 weeks at least.
It can be seen from the chart below that nifty has been moving in up or down in channels red trend lines are the channels of each rise. There have been three earlier rises and they has moved in channels and when ever it has broken the support line the markets have corrected for 5 weeks. The current rise is also moving in the channel and is above the support line indicated by blue circle and till it is above this support line then we have all the fair chances of market correcting for 5 weeks so keep a close watch on the support ling the moment it is broken we can just reverse our position.
It can also be seen from the above chart that nifty the blue line indicated by arrow is the one year trend line and it is also one of the formidable support line and it was broken only once in last one year. This along with the above support line are placed at around 5350 so any close below that would end of the current up move and we have to brace our selves to movement up to at-least 4900 levels.Positives for Nifty:
Market is above 200 day EMA.
Market has moved 50 day or 100 day EMA.
Market has moved 50 day or 100 day EMA.
DMI has moved above 20 indicating strength of bulls.
Negatives for nifty:
Elliott wave:
In Feb-March I have indicated in my Elliott study that it would be difficult nifty to move above 5415 and 5585 and till now both these have not be violated on closing basis so I would furnish the alternative structure if these are violated.
Directional Momentum index – (DMI)
Currently +D1 is above –D1 and +D1 flat indicating that bulls are at least having control of the market. As has been indicated earlier DMI has moved above 20 and is moving up indicating the strength of the bulls and till the DMI move up along with rise in market we might see a blow off rally. If DMI moved down then we can see market drifting down. In the last one years along with the rise when ever DMI has moved to 25 to 30 levels the trend has reversed whether this would happen now also we have to wait and see.
M.Sri Mahidar
Sunday 18th July 2010, Time 18.19 IST
Trend is friend
Monday, July 12, 2010
it can be seen from the chart above that there is huge divergence in the MACD histogram and also RSI. As Nifty is making a new 30 week closing high the volumes were less and also it is associated with -ve divergence of MACD and also RSI pointing out that bulls are not as strong as they appear to be. Unless and other wise a very very powerful up move materialises now there divergances would not die out too soon. So as of not techncially it is pointing towards a probable short term top after which we might see market slipping towards 5000 levels.Trend is friend.
Monday, July 5, 2010
Weekly technical Analysis for week ended 4th July 2010.
Nifty opened on a strong note and there after it corrected during the entire week and has closed at virtually lowest point of the week, there by indicating that bulls are week and that bears are slowly able to take the market down and also gaining upper hand. On weekly basis it has moved below the previous weeks low indicating that bears are gaining upper hand it may also be noted that this is the first time in last six weeks that market has closed below the last weeks low and also closed lower than the weekly open. This is clearly indicating that bears are atleast having upper hand. It may also be noted that DMI is moving down during the entire rise for last six weeks which is clearly indicating that even though the market is raising the bulls lack conviction and it is difficult at present for the bulls to take market higher.
I have been indicating about the time series analysis for past few months and nifty has been correctly following then and we were able to identify the time periods during which the markets might reverse. As has been indicated by me, the entire fall of April and May has take 6 weeks and also the rise from may end till now has consumed 6 weeks and markets were not able to make a new high, which is clearly indicating that market is taking longer time to move up and shorter time to fall. Till this phenomenon exists we can be sure that market would not rise away from the current levels. I have indicated in my last two weeks update that if the market does not make high within 6 weeks that we might see the market in the same range for some weeks. I have also indicated that market for the last one year would rise for 6 weeks and would spend the next 3 weeks in 100 point range there by raising for total 9 weeks and then fall like pack of nine cards for five weeks. And it appears to be following the same pattern and we have completed 6 weeks and if the time series analysis has to be true then we might be seeing one of the boring markets for the next two to three weeks. If there is any deviation from the same then we might anticipate change in trend of the market.
It can be seen from the chart below that nifty has been moving in channels and there channels are represented by channels of blue lines and when ever these channels are broken indicated by circles market has fallen to a great extent and in each of the case has fallen to the lower trend line indicated by arrows. This time also nifty has broken the trend line drawn from the low of 4800 so whether we can see the market moving towards the last arrow which happens to be at 4900 levels. It may be noted that this time nifty has till now failed to make a new high and if nifty fails to make a new high and moves towards 4900 then this would be an exception to the previous one years move. So we have to see whether nifty makes a new high and moved towards 4900 or moves towards 4900. If it moves towards 4900 first this would be the first time that lower high would be made which would be a bearish indication. We have to see for the phenomenon to unfold.
It can be seen from chart – 2 below that nifty broken the one year trend line blue line and this signifies a very bearish signal and we should not be surprised if the market falls violently. So if it stays below the trend line then it would fall not matter the bulls try. In order to indicating strength bulls have to take market above the trend line we have to see whether bulls would be successful or not. The coming week would clearly confirm the same.
Nifty opened on a strong note and there after it corrected during the entire week and has closed at virtually lowest point of the week, there by indicating that bulls are week and that bears are slowly able to take the market down and also gaining upper hand. On weekly basis it has moved below the previous weeks low indicating that bears are gaining upper hand it may also be noted that this is the first time in last six weeks that market has closed below the last weeks low and also closed lower than the weekly open. This is clearly indicating that bears are atleast having upper hand. It may also be noted that DMI is moving down during the entire rise for last six weeks which is clearly indicating that even though the market is raising the bulls lack conviction and it is difficult at present for the bulls to take market higher.
I have been indicating about the time series analysis for past few months and nifty has been correctly following then and we were able to identify the time periods during which the markets might reverse. As has been indicated by me, the entire fall of April and May has take 6 weeks and also the rise from may end till now has consumed 6 weeks and markets were not able to make a new high, which is clearly indicating that market is taking longer time to move up and shorter time to fall. Till this phenomenon exists we can be sure that market would not rise away from the current levels. I have indicated in my last two weeks update that if the market does not make high within 6 weeks that we might see the market in the same range for some weeks. I have also indicated that market for the last one year would rise for 6 weeks and would spend the next 3 weeks in 100 point range there by raising for total 9 weeks and then fall like pack of nine cards for five weeks. And it appears to be following the same pattern and we have completed 6 weeks and if the time series analysis has to be true then we might be seeing one of the boring markets for the next two to three weeks. If there is any deviation from the same then we might anticipate change in trend of the market.
It can be seen from the chart below that nifty has been moving in channels and there channels are represented by channels of blue lines and when ever these channels are broken indicated by circles market has fallen to a great extent and in each of the case has fallen to the lower trend line indicated by arrows. This time also nifty has broken the trend line drawn from the low of 4800 so whether we can see the market moving towards the last arrow which happens to be at 4900 levels. It may be noted that this time nifty has till now failed to make a new high and if nifty fails to make a new high and moves towards 4900 then this would be an exception to the previous one years move. So we have to see whether nifty makes a new high and moved towards 4900 or moves towards 4900. If it moves towards 4900 first this would be the first time that lower high would be made which would be a bearish indication. We have to see for the phenomenon to unfold.
It can be seen from chart – 2 below that nifty broken the one year trend line blue line and this signifies a very bearish signal and we should not be surprised if the market falls violently. So if it stays below the trend line then it would fall not matter the bulls try. In order to indicating strength bulls have to take market above the trend line we have to see whether bulls would be successful or not. The coming week would clearly confirm the same.
Positives for Nifty:
• Market is above 200 day EMA.
• Market has moved 50 day or 100 day EMA.
Negatives for nifty:
Daily MACD has given a sell signal.
Weekly MACD has given sell signal immediately after giving a buy signal indicating extreme weakness in the market.
All though the rise from 4800 the ADX has been moving down indicating that the up move lacked strength and it might not last long. But wait for the market to confirm.
Elliott wave:
In Feb-March I have indicated in my Elliott study that it would be difficult nifty to move above 5415 and 5585 and till now both these have not be violated so I would furnish the alternative structure if these are violated.
Directional Momentum index – (DMI)
Currently +D1 is above –D1 and +D1 has started to just move down and +D1 has started to move up indicating the bears are just finding themselves. It may be noted that during the entire rise from 4800 to 5375 DMI has been moving down indicating that bulls lack strength. While nifty has moved from 4800 to 5375 DMI has moved down from 31 to 17 currently. So unless and other wise DMI moves up bulls would not be able to take the market up.
M.Sri Mahidar
Sunday 4th July 2010, Time 20.13 IST
Trend is friend
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