As anticipated nifty is slowly inching upwards. The movement of nifty during the week is somewhat confirming the upward break out and we may not be surprised if nifty slowly moves further upwards. Nifty is still not out of woods as there seems to be some what huge resistances levels which are coming in it’s upwards movement. Nifty is still in the trading range from the last one year onwards. And till it breaks above it with volumes the upward movement is doubtful. But as the saying goes the market is king as it is now moving up there is no arguing with it, it knows some thing which the market participants. Nifty has made a 52 high during the week indicating the confirmation of the trend. All the four days in the week were positive indicating that the bulls did not bow to bears not even for a single day indicating the strength of the bulls. On weekly and monthly chars also the market seems to have given a clear break out indicating that we might have broken out of the trend so till nifty is above 5350 we can see upwards movement of nifty towards 5800 levels. So be prepared for it.
By the completion of the current week nifty has been continually rising for 16 continue weeks. This is the longest rise in time period wise in the current up-move from March 2009 onwards, previous up-move was for a period of 14 weeks from march 2009 to June 2009. During the previous up move nifty has doubled from its low levels and in the current up move is has just risen by 20% only. Thus indicating that bulls have been cautiously moving up and at every state bears were giving good fight but bulls are continually moving up. One of the noticing features or the distinctive features in the current up move and also the previous up move in March 2009 and June 2009 is that in the March to June 2009 up move the movement was a virtually vertical rise without any black candle in the weekly charts and was also the up move started with a positive divergence. And in the current up move the entire up-move was on –ve divergence of all the technical indicators. The upwards movement of the market associated with –ve divergences is somewhat making the rise doubtful. But technically the faster retracement of the last rise takes place there is not chance of the reversal indication. So till that happens we are still in a up trend.
Time period point of view as indicated above we have completed 16 weeks of rise, and as the saying goes we have all the possible chances of market rising for another 5 weeks to complete the next Fibonacci number. So we should hope that the market would rise for another 5 weeks so complete the Fibonacci so we should see market rising up in the coming weeks and also entire months also.
In the longer time frame we have completed 18 months and we are into the 19 month and as per this we should be heading for the next Fibonacci i.e. 21. So considering this we should atleast move up for another 2 months and we have all the probable chances of making a top in January 2011 or around that time. So January top is not new to Indian market and if the market rises up to that time we should be very very carefull.
The above chart is nifty monthly chart and it can be seen that it is clearly in the up trend and also the market is still in the channel which is in existence for last one year or so. So any firm close above 5750 only would propel the market to a probable above 6000 levels. so till the break above the resistance level would confirm the trend. As I have been pointing from several months, till the faster retracement of the last wave happens we are in a up move and we should continue to be up move till the faster retracement on down sides takes place.
Positives for Nifty:
§ Market is above 200 day EMA.
§ Market is above 50 day or 100 day EMA.
§ Weekly MACD is in a buy mode.
§ Weekly RSI has started to move up sharply indicating strength of up move.
§ Negatives for nifty:
§ The rise is on –ve divergences with MACD histogram and also RSI.
§ Daily MACD has given a sell signal
§ + D1 as moved above -D1 indicating that bulls have gained upper hand and only now DMI should start moving up to indicate strength of bulls. The slackness of DMI is indicating that bulls lack strength as of now.
Elliotte wave:
As nifty has broken above the 5585 and is moving up I have to rework on my elliotte waves and would furnish the same once it if finalized. Now I would try to furnish the wave pattern from the current wave from May onwards.
It can be seen from the chart that nifty is in the fifth wave of the current rise. It can be seen that the 3rd wave has clearly split into five waves indicating that it might be the extended wave and we are in the fifth wave after completion of which we might see a correction not seen in the last four months. It can also see that there is alteration in the wave-1 and IV which are the prerequisites of the wave pattern. It can be seen that the 4th wave has formed into an expanded triangle and it has split exactly into five waves.We can see fifth wave extension also in which case we can see very swift movement of the index now and in it the 5th wave would also be extended. So keep a close watch on the wave structure.
M.Sri Mahidar
Sunday 12th September 2010, Time 21.41 IST
Trend is friend
No comments:
Post a Comment