Weekly technical Analysis for week ended 25th December 2011.
I am writing this update after nearly three weeks as I was out of place on weekends and was not in a position to update on the technical updates. But nothing much seems to have happened technically as the market is at the same place where I have updated three weeks back. If any major technical event have happened I would have updated the same immediately. This during the last two weeks one of the powerful technical events have been taking place which seems all market participants have been ignoring. Nifty has once again moved below 200 week EMA which is a bearish signal for the market and indicates further down sides more violent ones cannot be ruled out till the time market stays below it. During the last five week it has been that nifty has closed below 200 week EMA thrice which itself indicates extreme weakness as the most powerful support level is not offering any credible support. As have indicated earlier also that during the last 11 years this is only the third time that nifty has moved below the 200 week EMA. And during the earlier two occasions once in year 2000 and also in year 2008 market have fallen very violently and that too markets have fallen by 25 to 30% from the level it broke below it. This time the break is at around 4800 level so the fall has to be nearly 25% from those levels which is hold your breath 1200 points giving us a target of at-least 3600 and chances of seeing 3300 of higher levels of corrections happen. You may be wondering what is the amount of correction after 200 week EMA was violated in 2000 the fall was 32% and in 2008 the fall was 40% so if this is taken into considering then we should be on our way to 3300 levels at-least. The fall may be very violent so be prepared for it.
From the month of august onwards market has been oscillating between 100 week EMA and 200 week EMA. It has made attempts twice to move above the 100 week EMA and failed in both the attempts and in each case of failure it moved down and moved down and in earlier two times it moved below 200 week EMA stayed below it for one week and then immediately moved above it. But this time for two consecutive weeks it closed below it which is a clear sign of strength of bears as they were successful in maintaining bulls below very important support level. So this is clearly a sign that they are bears and slowly coming into the market and one thing is sure they would not be out till a final blow out punch is given by then where bears would be decimated at-least for short period of time. 200 week EMA is at 4854 so if nifty goes near it is a clear opportunity to go short in the nifty with a stop loss at 15 week EMA. So it appears that we are heading for a final blow out punch by the bears.
Nifty is at near the levels where in an slight move downwards might put it into a catastrophic fall. It is at the same levels from where nifty started its very violent fall both preceding and post lehman Bros collapse it can be clearly seen in the chart. it is also at those levels where nifty opened at the gap up opening levels of may 2009 levels any breach of 4500 has all chances of hell breaking loose and bulls running for cover as we do-not have any credible support till 3200 levels. And we can see market falling very very swiftly on breach of 4500 as we would reach the zone of no support. So brace of for fall if 200 day EMA is not taken out in months to come.

it can be seen in the above chart that we are near the region of no support which is clearly shown with brown circles any break of the same would result in a very very big fall. So bull be cautious.
Positive for the market:
• Daily stochastic is in buy mode indicating that we might see a short up move.
Negatives
• Market is finding resistance at 200 day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• Daily and weekly MACD has a given a sell signal.
• Weekly Stochastic is in a sell mode.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.
M. Sri Mahidar
Trend is Friend.
Monday, December 26th 22.32 IST

Nifty Weekly Technical Update

Weekly technical Analysis for week ended 27th November 2011.
Nifty this week opened on a week note and continued to moved down and closed at 4700 levels. One of the noticing features of the current weeks movement is that nifty has moved below 4700 and made a new 52 week lows thus giving an indication that bulls are successful taking market lower. Till now 4700 was offering support for nearly three months time and this week it was conquered by bears which is clearly indicating that further down sides are not ruled out. Another important thing which has happened during the current week is that nifty has moved below the low of 2010(previous year) this even has occurred only once before in the last one decade, 2008 was the only year when nifty has moved below the previous years lows and in that instance it has fallen by around 30% from those levels and if this time also it falls to that extent then we have chances nifty going below 3500 levels. So will it go there only time would tell the same? We have to wait for weekly close below the previous year’s low of 4675 would confirm that we are in for a bigger trouble for bulls. Another important technical event which has taken during the week is that nifty has moved below the 200 week EMA this has happened for the third time in last three months. In august it closed below 200 week EMA but in October twice it found support at that level and not in November it broke with ease the 200 week EMA which clearly indicates that now it would becomes a formidable resistance. Now nifty should move above the 200 week EMA in the coming weeks otherwise bulls would have tough time in coming months. 200 week EMA is at 4855 so this is the level which we should keep an eye. Nifty has been moving between 200 day EMA and 200 week EMA for last four months and this time the floor was opened giving an indication that bears would be dominating the market in coming time. Technically we are entering into a very crucial level we are entering into the gap up opening levels of may 2009 post election results and any move below that level would result in market just collapsing vertically in which case bulls would be decimated. So any move below 4400-4500 has all chances of market collapsing very violently. So keep a close watch on those levels as we may have a good buying pressure at those levels if those bought at those levels would not support the market then we can have a serious trouble for bulls. Technically it appears that the coming new years is going to be good for bears.
Positive for the market:
• Daily stochastic is in buy mode indicating that we might see a short up move.
Negatives
• Market is finding resistance at 200 day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• Daily and weekly MACD has a given a sell signal.
• Weekly Stochastic is in a sell mode.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.

From so many weeks I have indicated that we might be forming an expanding triangle and it appears that we might have completed fourth wave and it appears that we have started the fifth wave and it appears as per the current wave structure and we might have completed the 1st wave of the fifth wave and it appears that we might have completed 2nd wave of the 5th wave and it seems that we might has started the 3rd wave of the 5th wave and generally the 3rd wave would be most violent and devastating and the longest, which is being indicated by gap down opening. The first wave of the 5th wave was around 750 points and the second wave was nearly 61.8% of the first wave and wave would normally be at-least 161.8% of the first wave so we have chances of correcting around 1250 points from the end of the second wave of the 5th wave which happens to be around 5700 levels giving us a target of 4500 and we have nearly achieved the same. But still nifty has to violate till then it would hold good.
The updated wave structure is now being given. This structure has to be negated if 5453 is violated and I have to work out the new structure. As of now it appears that we have completed fourth wave of the third for the fifth wave and we are in completion of the firth wave of the third wave of the fifth after completion of that we might see market raising up and there after we might start fifth of the fifth wave of the expanding triangle and this would have to be more violent in case of expanding triangle
M. Sri Mahidar
Trend is Friend.
Sunday, November 27th 21.32 IST

Weekly technical Analysis for week ended 18th November 2011.
The movement of nifty has negated any of the bullish sentiment which bulls have tried to bring and also lot of analysts have started to term it as new bull move. But the Elliott wave and price movement has been clearly indicating that the bulls market has not yet started. Bear market ends when there are so many bears around and at the present time it seems still bears are faaaar away as at every rise the bulls come and say that bull market might have started. Bull market would only when the market rises and all the people would say that the rise is temporary and market would fall after that. So we have to simply wait for the moment for the bull market to come. Elliott wave is clearly indicating that the wave structure has still not completed and we are still far away from the bottom. i have not see times where when interest rates and inflation are raising and market has also kept raising, generally market is inversely related to inflation and interest. As currently interest and inflation are rising continually we can expect market to make new lows. So be prepared for it. Now we come to the market. In the current week bulls were running for cover and it appears the bears have come with a bang. This week market moved below all the important moving averages and now it is below all major moving averages. One of the noticing features is that this week is that nifty once again has found resistance at 200 week EMA and fell from there and that too very violently. This is the second time that nifty has found resistance at 200 day EMA firstly it happened in July 2011 and secondly it was this time. Previously in July market has fallen 20% and we have to see whether this time also the market falls at-least this time also till now we have fallen only 7-8% only so we have at-least another 12% fall in the market. So we have to use all the rises either for liquidating our positions or going shorts. So bulls be care full.

It can be seen from the chart indicated by black arrow that MACD has just give sell signal and the gap between average and trigger line is increasing and if MACD has to come all the way down the we can expect the market to go down from current levels after brief consolidation. So be prepared for a fall. Till the nifty is below 200 day EMA we have all the chances of moving down further.
Another important event which is happening is that nifty is once again at 200 week EMA. Last two times in august and October it has found support at that 200 week EMA and then reversed towards 5300 levels, this is the third time in last three/four months that nifty is finding itself at the same point. As this is the third time it has all chances of breaking it. But we have to wait and see. Once nifty breaks the 200 week EMA the fall might become very prolonged and also very violently down ward so once 200 week EMA is taken out on weekly basis bears can rejoice. 200 week EMA is at 4856. So this level is to be closely watched.
Positive for the market:
• Nifty has exactly taken support at 200 week EMA.
• Weekly MACD is in buy mode
• Daily MACD is about to give buy signal.
Negatives
• Market is finding resistance at 200 day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• Daily MACD has a given a sell signal.
• Weekly Stochastic is in a sell mode.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.
This week I am not giving any Elliott wave update as there is not much which has happened in last 10 days. This time I would be giving the indication of the broader market and what its indicating for them for mid-caps and micro caps. One of the noticing features is the all the indices have formed a heads and shoulders pattern and they has broken though the neck line and the minimum target is yet to be achieved. So it is clearly giving an indicating the carnage in the market is still going to continue before any respite for the markets. As you are aware that and also in have indicted in my earlier updates that nifty has formed H&S pattern and neck line was broken in august and we have target of around 4200 for that which is still to be achieved. Now see the same pattern in other indices which are given below

It can be seen from the above that all the indices including nifty are mimicking, and all the indices are 15% away from the minimum target so we can expect indices falling at-least 15% from current levels. One of the noticing features of the 15% level is that if the indices achieve the minimum target then the indices would be at the may 2009 levels(post election result) gap opening level and any move below it we can see a vertical fall in the market to the march 2009 levels so now we are entering into crucial levels for the market and bears would try to take wind away from the bulls. So we are in for some very eventful months in our market and also world markets.
M. Sri Mahidar
Trend is Friend.
Sunday, November 19th 22.00 IST

Weekly technical Analysis for week ended 5th November 2011.
Nifty during the week was in a very tight range of 130 points and in the coming week or weeks we can see the range expanding and market moving in that direction in a long way. On the noticing features is that nifty is finding resistance at 200 day EMA and finding support at 100 day EMA so its struggle between these two. So we have to see in which direction the break out happens. 200 day EMA offering resistance is good news for bulls and 100 day EMA offering support is good news for bulls, so it clearly indicating that the market is undecided and we have to patiently wait for market to break any of these levels. Market failing to go past 200 day EMA is good news as historically below 200 day EMA bears are active and long term investors are active above 200 day EMA. So as long as it is below 200 day EMA bears would be active. Actually this week nothing has happened in the market as to give a detailed analysis.
The heads and shoulders pattern indicated three months back is still intact and till the neck line is violated we have all chances of nifty moving down towards the intended target of 4200 in coming months we have to see whether the same would be violated or not. Now we are nearing the neck line which is nearly 200 points away. Now we have to see whether the same is violated or not.

the H&S pattern is clearly depicted in the above chart. it appears to be forming a perfectly H&S pattern. And if it materializes we can get an excellent shoring opportunity at around neck line. The neck line is of nearly two years trend line so its going to offer a good amount of resistance in the upside movement of nifty. If nifty closes above it on weekly basis then we can see nifty moving up substantially probably above 6000 levels. But as of now the probability appears to be break but we cannot rule out anything in the market.

Positive for the market:
• Nifty has exactly taken support at 200 week EMA.
• Nifty has moved above 50 day EMA,100 day EMA
• Weekly MACD has given a buy signal
• Daily MACD is in buy signal.
• Daily and weekly stochastic is in buy mode.
Negatives
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.
Elliotte Wave analysis:
In previous weeks I have indicated that we might be forming an expanding triangle and it appears that we might have completed fourth wave and it appears that we have started the fifth wave and it appears as per the current wave structure and we might have completed the 1st wave of the fifth wave and it appears that we might have completed 2nd wave of the 5th wave and it seems that we might has started the 3rd wave of the 5th wave and generally the 3rd wave would be most violent and devastating and the longest, which is being indicated by gap down opening. The first wave of the 5th wave was around 750 points and the second wave was nearly 61.8% of the first wave and wave would normally be at-least 161.8% of the first wave so we have chances of correcting around 1250 points from the end of the second wave of the 5th wave which happens to be around 5700 levels giving us a target of 4500 and we have nearly achieved the same. But still nifty has to violate till then it would hold good.

The updated wave structure is now being given. This structure has to be negated if 5453 is violated by nifty in the current move and I have to work out the new structure. As of now it appears that we are in completion of the fourth wave of the third wave of the third of the fifth and after the completion of the same we have all possible chances of nifty dropping down towards 4700 levels. As of not it appears that the fourth of the third of fifty is forming a flat and all the internal structure is perfectly falling in place but any move above 5453 would negate the pattern and I have to rework the pattern which would be done when the same happens.
M. Sri Mahidar
Trend is Friend.
Sunday, November 6th 19.26 IST

Nifty Weekly update

Weekly technical Analysis for week ended 29^th October 2011.

Bulls have not at-least able to conquer the 5200 successfully in this truncated week. Even though the week was a truncated week it was an eventful week. Nifty was able to move above 5200 on diwali day and on next trading day it was a huge gap up day way above the 5200 indicating that bulls were able to go past the resistance of bears offered at 5200 level. The movement above 5200 is a major victory for bulls and we can see further movement of market on upsides. One of the noticing features of the movement of nifty during the week is that nifty was able to successfully move above 100 day EMA and also on Friday it moved and closed above 200 day EMA. It’s a major achievement for the bulls and we have to see whether follow up buying takes or not. Nifty is now entering into huge resistance levels and it is expected to face huge resistance at every rise. Nifty has to move and close above 5450 then 5500 and then 5700 then only we can say that bulls were able to defeat bears. Any failure of nifty move past these levels would result in nifty falling towards 5200 again. Another area of strength for bulls is that they were able to take nifty above 100 week EMA which is major achievement for bulls and not this 100 week EMA would offer support for any downward movement of nifty. The 100 week EMA is at 5257 so any downward movement of nifty is expected to find support at those levels.

In the above chart it can be clearly seen that on weekly charts nifty has formed a higher high which has been preceded by higher low which is one of the powerful bullish signal, so now till a lower low is formed the trend would appears to be up. It can be seen in the above chart that nifty has broken below the H&S pattern (neckline) in August has moved down there after and now it has started to move up towards the neck line, we have to see whether the neck line would offer resistance or not. Generally when a H&S pattern is broken the price first moves down and then it moves up towards the neck line it moves slightly above the neck line and then collapses in the direction of the break out. So will the neck line offer resistance or not we have to see if nifty fails to move above the neck line it would form a perfect H&S pattern and we have all chances of market collapsing down ears towards 4700 levels again. One of the noticing features of the neck line is that it’s nearly as 2 year trend line and it would not be easy to break above it just in a flash. So nifty is expected to face huge resistance at around 5450-5500 levels (the point where the trend-line is present. Notice the volumes on the current rise the volumes have been constantly falling or reducing on each subsequent rise. Does that indicate strength of bulls. Its left to your imagination. You may be thinking that I am still a bear when everybody is gung ho above the up-move above 5200 level that too with a gap up, I only tell what the patterns are indicating irrespective of what other are saying. When all the negative patterns are negated then we can say that bulls have achieved success.

Positive for the market:

· Nifty has exactly taken support at 200 week EMA.

· nifty has just moved above 15 week EMA.

· Nifty has moved above 50 day EMA,100 day EMA and 200 day EMA.

· Weekly MACD has given a buy signal

· Daily MACD is in buy signal.

· Daily and weekly stochastic is in buy mode.

Negatives

· 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.

· weekly MACD is in sell mode,

· Monthly MACD is in sell mode indicating weakness in the market.

· 15 week EMA is below 50 week and 100 week EMA.

I would be furnishing Elliott wave update next week as I am busy in some personal work.

M. Sri Mahidar

Trend is Friend.

Sunday, October 30^th 19.37 IST

Nifty Weekly

Weekly technical Analysis for week ended 15th October 2011.
This week nifty movement is indicating some strength and we cannot ignore the same. Whatever may be our technical interpretations, the market is showing strength and we have to believe it till it shows/indicates weakness. We have been discussing from so many weeks that nifty is stuck in range of 5200 to 4700 and every time when it goes near 4700 it bounces towards 5200 and whenever it moves nears 5200 it again falls to 4700. So I have been indicating that till this range is taken out we have to trade this range. This time it is again nearing 5200 and coming week we might see nifty attempting to cross 5200 we have to see whether the same would be conquered or selling pressure would emerge again or not. But this time it appears that we might see nifty moving above 5200. Elliott wave is clearly indicated when it took support at 4700 and the same appears to be coming true. The elliotte wave details would be given in the relevant section. One of the noticing feature of the current move is that nifty has bounced from the 200 week EMA which is a indication of strength of the bulls. I have indicated in my earlier updates that 200 day EMA is the last line of defense for the bulls and it appears that bulls were able to defend the territory. Bouncing from the 200 EMA is bullishness for the market. As nifty has bounced from the 200 day EMA the next resistance appears to be at 100 week EMA which happens to be at 5252. So this is the level which has to be watched. Nifty has been founding support at 200 week EMA and resistance at 100 week EMA for lat two and half months. So 100 week EMA is going to offer healthy resistance this time also. So as of instead of 5200, 5250 is going to be healthy resistance level. So this is the level to be watched for. Generally market goes above the resistance level, gives an impression that resistance is taken out and bullishness has come into the market and then market plunges we have to see whether this time also the same happens or not. If 100 week EMA is taken out it might find resistance at 50 week EMA. So we are entering in the territory of resistance levels. And the coming weeks are going to be testing time for the bulls and we might find resistance at each and every level. One of the noticing feature of the last weeks movement is that the volumes are less on the green candle days and more on the red candle days and during the last week each subsequent day the volumes were less than that of the previous days which would be concern for bulls. One of the noticing features is that weekly MACD is on the verge of giving buy signal which becomes a bullish signal we have to see whether the same would materialize or not.
The chart below is clearly indicating the resistance and support levels for the nifty. The double headed arrow is indicating the 200 week EMA and 100 week EMA on either sides and we can clearly see the resistance and support levels. And also not the two important things in that chart one is indicated by blue arrow is at 5200 which is the level which was taken out in august and that would offer resistance as of now. And if it is taken out then we have resistance at blue line indicated by red arrow. This is nearly two years resistance level and also neck line of the break down from the H&S pattern which break down has happened in august 2011. So till all these resistance levels are taken out bulls cannot be comfortable.
 

Positive for the market:
• Nifty has exactly taken support at 200 week EMA.
• nifty has just moved above 15 week EMA.
• Nifty has moved above 50 day EMA and is approaching 100 day EMA.
• Daily MACD is in buy signal.
• Daily and weekly stochastic is in buy mode.
Negatives
• Nifty is trading below 100 day and 200 Day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• weekly MACD is in sell mode,
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.
 
Elliotte Wave analysis:
In previous weeks I have indicated that we might be forming an expanding triangle and it appears that we might have completed fourth wave and it appears that we have started the fifth wave and it appears as per the current wave structure and we might have completed the 1st wave of the fifth wave and it appears that we might have completed 2nd wave of the 5th wave and it seems that we might has started the 3rd wave of the 5th wave and generally the 3rd wave would be most violent and devastating and the longest, which is being indicated by gap down opening. The first wave of the 5th wave was around 750 points and the second wave was nearly 61.8% of the first wave and wave would normally be at-least 161.8% of the first wave so we have chances of correcting around 1250 points from the end of the second wave of the 5th wave which happens to be around 5700 levels giving us a target of 4500 and we have nearly achieved the same. But still nifty has to violate till then it would hold good.
It appears that we might have completed the third wave of the fifth wave and we might have just started the fourth wave up and which should move above 5200 to confirm the same, that is why I have said earlier that we might see nifty moving above 5200 giving a false break out and then collapsing. Once the fourth wave is completed we might start the fifth wave which should be devastating wave. Generally the fifth wave of the expanding triangle should be the most devastating and we might enter into the fifth of the firth in the coming weeks which would plunge the market to sub 4500 levels probably sub 4000 levels. So be prepared for the same.
Another alternative which can be derived as of now is that, we might still be completing the fourth of the third wave of the fifth wave. The fourth of the third wave of the fifth wave might be forming a flat and in which case market might start the fifth wave of the third of the fifth which has chances of taking nifty towards or below 4700 levels and after that once again nifty has all chances of attempting 5200 again and then plunge. So not the wave structure is becoming complicated so would give sleepless night for the Elliott wave analysts.

M.Sri Mahidar
Trend is Friend.
Saturday, October 15th 23.21 IST

nifty Weekly Technical update

Weekly technical Analysis for week ended 1st October 2011.
This week the market is of mixed trend, but it still showing a weakness and it appears that bears are active even during the current week also as out of five trading days three days were bear candle days even though nifty closed with a positive candle. This clearly indicates that the closes were lower that the opens, thus indicting that the close were at the lows of the days. This week nifty opened on a weak note with gap down and there after recovered and moved up and moved above the psychological level of 5000 and on Friday even though it moved above 5000 it again collapsed down to close below 5000 second week in a row. There are so many things which are happening during the week technically and every thing is pointing out that bears are slowly and steadily becoming active and it appears that we are nearing days when capitulation is going to take place in near future where bears would just demolish bulls. Till now at every stage the bulls are coming back and trying to take market up and failing and the time/day would come were they would completely surrender to bears and we might see some vertical falls in coming weeks or months. One thing is sure that until the capitulation takes place the market is not going to turn up. I have seen in my short technical career that till there is a vertical fall( which generally is the last stage of the fall) there bear market is not going to end. So we have to wait patiently till the vertical 90% fall happens till then the market would be drifting slowly downwards. Now we come to the technical features which have occurred. One of the powerful thing is that 50 week EMA has moved below 100 week EMA which is a very bearish indication. this even has happened for the first time after may 2009 which itself is an indication of weakness. I would explain the thing in details which clearly gives the bullish and bearishness in the market. The 15 week EMA moved above 100 week EMA in 2003 and it maintained above it for till September 2008( it was in bullish mode till 5 years) when it moved below 100 week EMA and there after market collapsed you know that its still fresh in our memories. And one this which is to be noted is that this time also it moved below 100 week EMA in September only so will there be any co-incidence this time also, if that happens then we are in for a big big fall this month which happens to be in October. Another thing to be noted that in 2008 Diwali was in October that too on October 28th and just before diwali the market tanked and made low on a day before diwali. This time also diwali is on 26th so will history repeat itself. Wait and watch. It has been seen that in October is the month where if it’s a bull market the market just races up and if its bear market the markets just tank. So we have just entered into October and we seem to be in a bear market so will we see a good and healthy fall in the market and form a bottom. Just wait and watch And another thing is that nifty again moved below the 200 week EMA during week and there after recovered and closed above it. 200 week EMA is at 4838 and any move below it would signal bearishness in the market. So now 4838 is the level to be closely to be watched. So keep your fingers crossed, and patiently wait as we may get good prices which can be lower that the prices as of not at-least 30-40% lower than the current levels.

It can be seen in the below chart the movement of the 15 week EMA below 100 week EMA by a red circle. This event has happened for the first time after nearly 27 months indicating weakness. 

Positive for the market:
• Nifty has exactly taken support at 200 week EMA.
• Daily MACD is in buy signal.
Negatives
• Nifty is trading below, 50 day, 100 day and 200 Day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• weekly MACD is in sell mode,
• Daily and weekly stochastic is in sell mode.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.
Elliotte wave analysis: nothing much has happened as EW during the week to change any thing so it remains same as it is.

M.Sri Mahidar
Trend is Friend.
Sunday, October 2nd 19.26 IST

Weekly technical Analysis for week ended 24th September 2011.
In last week’s update, I have indicated that even though the market was moving upwards I have indicated that the undertone appears to be week as the close on was at the low point of the day and this week it appears that this week the market has proved us right. So it clearly appears that the bears have taken control of the market. We might given reasons for such weakness, like US, EOROZONE crisis, but technical’s were indicating the same for long time now and if any body is following this weekly update then, the current market fall might not have been surprise for them. Then you might be having a question, as to how technical’s show this, technical’s only show the perception of the investors towards the market and its we have to infer the same. technical show that there is something wrong in the market or going to be wrong and then the news flows after some time. Generally price discounts, 6 months ahead especially during the turns. As you can see the market has turned down in January or so and there after the market started to fall vigorously in July etc., and also note that news have also become very negative during this period only. I have seen in my short stint as a technical analyst, that price destruction occurs first and then news flow. So when the prices or pattern shows something is wrong with the market or the patterns are now comfortable then its better to respect that, and be cautious with the market as it our utmost responsibility to protect our capital. Now we would come to the market.
This week the market opened slightly low and there after moved up towards 5200 levels and from there it collapsed on the last two days of the week. It can be observed that the rise takes longer days and the fall is less that 50% of the time of rise which clearly indicates that bears are having upper hand in the market. Till this phenomenon reverses we can clearly hope that the trend is down and if the scenario reverses then we can easily go long. Last two days have really scary for bulls as it seems to have dented the confidence of the bulls and it appears that they might have given up to bears. One of the very very important things which has happened during the week is that nifty failed to move above the 5200 level and now it appears that 5200 is the laxman rekha for the market. So till 5200 is taken out on weekly basis bulls cannot feel comfortable. It can be seen from the chart below that selling is coming in a substantial level at around 5200 levels and it has been a substantial gap down in the market at that level. Now it’s the third time nifty has reversed from 5200 levels in last two months. So it cannot be taken lightly. When one level offers resistance continually then we can expect as substantial down side from that level or market would consolidated at that levels to gain strength and then make an attempt to conquer the resistance level. So we can either expect a down side from current level to take out the selling pressure or consolidated. Genearlly it takes longer time. so we can expect atlest 5-6 months for the market to gain strength. But if the price indicates reversal earlier then just believe in price. As my motto is “PRICE is KING”.
Point and figure charting clearly shows at what levels the selling or the buying pressure would come as it considers only price and nothing else. It can be seen in the chart below that there is a clear selling pressure at around 5200 levels. And the buying levels are around 4800, 4600 and 4500 levels. P&F charts are clearly indicating that hell would break loose if the nifty moves below 4600-4500 levels as we might see a verticals fall as has been seen in 2008 so we are not very near those levels so be careful while investing at these levels as any failure to the bulls to defend that territory would be disastrous for them.

It can be seen from the chart above that in 2009, 4500 was offering resistance for nearly six months and there after once it was taken over in 2010 it offered as support for further moves and so now we have to see the same level would provide support this time also. If its yes then it would be good for bulls and if not then bears would laugh at bulls. So any break of 4500 on weekly basis we should just short as we can see a very rapid fall in the market and bulls would run for shelter.
Now we come to weekly chart which is shown in the chart below. It can be clearly in the weekly chart below indicated by arrows that the arrows are continually moving down. It moving down is clearly indicates that when every buying is coming into the market the selling is coming immediately and evey selling point lower that the previous selling area. And in august we have broken the triple bottom which is a very bearish pattern on weekly chart and the target for the same works around 4200 levels, this is the minimum target. So as the pattern is formed in the weekly pattern we can expect the target to be met.
You can also see the same reverse thing in 2010 and 2009 and the arrows are clearly showing that the buy points with black arrows and the each buy point was higher than the previous one and the break out happened on the upside and the market moved substantially before reversing. This time the break down happened after down ward arrows so we should move substantially before reversing so we can hope the 4200 to be achieved in coming months. As per this unless and other wise 5800 is taken out we cannot hope any thing for bulls.

Positive for the market:
• Nifty has exactly taken support at 200 week EMA on friday.
• Daily MACD has give a buy signal.
Negatives
• Nifty is trading below, 50 day, 100 day and 200 Day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• weekly MACD is in sell mode,
• Daily and weekly stochastic is in sell mode.
• Monthly MACD is in sell mode indicating weakness in the market.
Elliotte wave analysis: nothing much has happened as EW during the week to change any thing so it remains same as it is.

M.Sri Mahidar
Trend is Friend.
Sunday, September 25th 13.00 IST

Nifty weekly Update

Weekly technical Analysis for week ended 17th September 2011.
Nifty movement during the week on one side indicates bullishness and also on another side it indicates strength of the bears which might have been overlooked by all. You might be wondering how can this happen I would explain the details. This week there are five trading days and of these three are red candle days and two is a green candle day. the red candle indicates that the close is below the open so all these days the closes were less that the open indicating that bulls were able to take the market down which clearly indicates that the market is in a bearish mode and it indicates the bears were having upper hand even though the market as moving up. This generally is a rare phenomenon and we should patiently wait for the market to drift down. One of the noticing feature of the current move is that nifty is able to find support at around 4900 levels and another thing is that it is able close above 5000 level which is a psychological level for bulls. Another important thing which is happening is that nifty is nearing 5200 level where it faced resistance in its previous up move, so we have to see whether it would offer resistance at these levels or not. Technically not much has happened during the week so not much can be provided during the week what even has been said during last week holds good even for this week also.
One of the noticing feature of the current pattern is that in 2008 also H&S pattern was broken it moved up touched neck line in September and then collapsed, this time also in September we are moving towards the neck line after H&S pattern so this time also history would repeat we have to wait and see.
Positive for the market:
• Nifty has moved above 200 week EMA.
• Daily MACD has give a buy signal
• RSI has is moving up and has just moved to 50.
• Stochastic oscillator is in a buy mode.
Negatives
• Nifty is trading below, 50 day, 100 day and 200 Day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• weekly MACD is in sell mode,
• Daily and weekly stochastic is in sell mode.
• Monthly MACD is in sell mode indicating weakness in the market.
Elliotte Wave analysis:
In previous weeks I have indicated that we might be forming an expanding triangle and it appears that we might have completed fourth wave and it appears that we have started the fifth wave and it appears as per the current wave structure and we might have completed the 1st wave of the fifth wave and it appears that we might have completed 2nd wave of the 5th wave and it seems that we might has started the 3rd wave of the 5th wave and generally the 3rd wave would be most violent and devastating and the longest, which is being indicated by gap down opening. The first wave of the 5th wave was around 750 points and the second wave was nearly 61.8% of the first wave and wave would normally be at-least 161.8% of the first wave so we have chances of correcting around 1250 points from the end of the second wave of the 5th wave which happens to be around 5700 levels giving us a target of 4500(o no) we might doubt this target but if the pattern is correct then we have all chance of correcting. So now we are near the target so Elliott wave has again played its part.

Generally in Expanding triangle pattern the fifth wave goes near or below the trend line and the low the trend line is more frightening for bulls around 3800 levels really scary. Nearly 80-90% of the time it happens. So till it is proved otherwise we can expect these levels. The latest wave count is give above 
The updated wave structure is given in the chart below. Last week I have given three options and it appears that one option has materialized and which is given below. As per Elliott it appears that we are still in formation of third wave it appears that we might have or on process of completion of the 4th wave of the third of third and we might have started the fifty wave of the third and the target for the same comes to atleast around the low of the august so will be reach the target. Wait and watch. If any change in the wave structure would be furnished once it is confirmed.The completion of the fifth wave of the third would result in completion of the third of the fifth wave and after which the market would turn up very vigorously towards atleast 5200 levels and from there the fifth of fifth would start and as per the expanding triangle the fifty wave should be more devastating of the all waves so that would happen or not we have to wait and watch. So Elliott is telling that its still not time for long time investment in stocks. So just stay in cash.

India VIX

India VIX( volatility index) is giving an interesting thing, it is giving an indication that it has just broken the triangular formation for one year or so and it has just taken support of the trend line and moving up indicating a perfect set up. Market generally moves in opposite direction of the VIX, indicating that we have all possible chances of market moving down to a great extent we have to wait and watch for the same. Given below is the weekly chart.

M.Sri Mahidar
Trend is Friend.
Sunday, September 18th 18.00 IST

Crude

Weekly technical Analysis for week ended 9th September 2011.
The beginning of the week the market was strong and continued to move up and the end of the week especially on Friday indicated a weakness in the market and possible down sides on the coming weeks. Last week I have indicated that we can see selling pressure coming into the market at around 5200 levels and you can see that the market made a high of 5169 which is virtually nearly 5200 so it seems that technicals seems to be working for the market. Nifty has found support at around 5200 for nearly six months and last month it broke below it so now we would be getting resistance at those levels. So now we can see selling pressure at 5200 level. Any weekly close above 5200 would be a significant event for bulls. So as of now till 5200 is taken out bulls would not have comfort. As nifty has failed to move above 5200 we have all possibility of nifty moving towards 200 week EMA which happens to be at around 4800 level. Will we be seeing nifty moving down to those levels in coming weeks? Wait and watch.

It can be seen from the chart that nifty is finding resistance at around 5200 levels. There are two events that are giving resistance and why 5200 is so crucial. First you see the red ling the ling at 5200 has offered support twice and in august it broke indicating that It would offer resistance when the market moves near it and it happens to have happened now. So as far a technicals are concerned we can see nifty moving towards 4800. Another thing to watch out is that nifty has formed a head and shoulders pattern and broke the neck line in august as the H&S pattern has been formed over a period of nearly 24 months, we should have more than one reason to expect the neck line to offer resistance and it also seems to have offered resistance. The resistance line at around 5200-5300 levels. It’s a classical H&S pattern and if history is considered after breaking the neck line it moves up to or near the neck line and then the fall would be more violent that the earlier one and fall as the faster rate. So we can expect some bad days or weeks for the bulls. So be braced for it.
Positive for the market:
• Nifty has moved above 200 week EMA.
• Daily MACD has give a buy signal
• RSI has started to move up from oversold levels on daily charts.
Negatives
• Nifty is trading below 15 day, 50 day, 100 day and 200 Day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• weekly MACD is in sell mode,
• Daily and weekly stochastic is in sell mode.
• Monthly MACD is in sell mode indicating weakness in the market.
Elliotte Wave analysis:
In previous weeks I have indicated that we might be forming an expanding triangle and it appears that we might have completed fourth wave and it appears that we have started the fifth wave and it appears as per the current wave structure and we might have completed the 1st wave of the fifth wave and it appears that we might have completed 2nd wave of the 5th wave and it seems that we might has started the 3rd wave of the 5th wave and generally the 3rd wave would be most violent and devastating and the longest, which is being indicated by gap down opening. The first wave of the 5th wave was around 750 points and the second wave was nearly 61.8% of the first wave and wave would normally be at-least 161.8% of the first wave so we have chances of correcting around 1250 points from the end of the second wave of the 5th wave which happens to be around 5700 levels giving us a target of 4500(o no) we might doubt this target but if the pattern is correct then we have all chance of correcting. So now we are near the target so Elliott wave has again played its part.
Generally in Expanding triangle pattern the fifth wave goes near or below the trend line and the low the trend line is more frightening for bulls around 3800 levels really scary. Nearly 80-90% of the time it happens. So till it is proved otherwise we can expect these levels. The latest wave count is give below 
The updated wave structure is given in the chart below. Last week I have given three options and it appears that one option has materialized and which is given below. As per Elliott it appears that we are still in formation of third wave it appears that we might have completed the 4th wave of the third of third and we might have started the fifty wave of the third and the target for the same comes to atleast around the low of the august so will be reach the target. Wait and watch. The completion of the fifth wave of the third would result in completion of the third of the fifth wave and after which the market would turn up very vigorously towards atleast 5200 levels and from there the fifth of fifth would start and as per the expanding triangle the fifty wave should be more devastating of the all waves so that would happen or not we have to wait and watch. So Elliott is telling that its still not time for long time investment in stocks. So just stay in cash.

M.Sri Mahidar
Trend is Friend.
Sunday, September 11th 21.16 IST

Weekly technical Analysis for week ended 3rd September 2011.
Last week was truncated week and it was eventful to the bulls. The market opened with a gap up opening and continued to move up during the entire week. During the current weak nifty moved nearly 300 points from the earlier weeks close. The rise during the week was too fast to be comfortable to the week. The virtual straight rise of the market is raising doubts on the strength of the rise, and pointing towards short covering rally rather than genuine buying. First indication of the strength of the market would come on weekly close above the 5200 and would be confirmed on close above 5700. So till 5700 is taken out the down side is not ruled out. So don’t be carried away by the movement of the current week. One of the noticing features of the current weeks movement is that nifty has moved above the 200 weeks EMA and bulls have proved that they are still holding strong and till its take out the range is limited to 4800 to 5200 and any change of range expansion would come only on these limits being taken out. So keep a watch on these limits carefully.

Positive for the market:
• Nifty has moved above 200 week EMA.
• Daily MACD has give a buy signal
• RSI has started to move up from oversold levels on daily charts.
Negatives
• Nifty is trading below 15 day, 50 day, 100 day and 200 Day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• weekly MACD is in sell mode,
• Daily and weekly stochastic is in sell mode.
• Monthly MACD is in sell mode indicating weakness in the market.
Elliotte Wave analysis:
In previous weeks I have indicated that we might be forming an expanding triangle and it appears that we might have completed fourth wave and it appears that we have started the fifth wave and it appears as per the current wave structure and we might have completed the 1st wave of the fifth wave and it appears that we might have completed 2nd wave of the 5th wave and it seems that we might has started the 3rd wave of the 5th wave and generally the 3rd wave would be most violent and devastating and the longest, which is being indicated by gap down opening. The first wave of the 5th wave was around 750 points and the second wave was nearly 61.8% of the first wave and wave would normally be at-least 161.8% of the first wave so we have chances of correcting around 1250 points from the end of the second wave of the 5th wave which happens to be around 5700 levels giving us a target of 4500(o no) we might doubt this target but if the pattern is correct then we have all chance of correcting. So now we are near the target so Elliott wave has again played its part.

Generally in Expanding triangle pattern the fifth wave goes near or below the trend line and the low the trend line is more frightening for bulls around 3800 levels really scary. Nearly 80-90% of the time it happens. So till it is proved otherwise we can expect these levels.

The updated wave structure is given in the chart below. Last week I have given three options and it appears that one option has materialized and which is given below. As per Elliott it appears that we are still in formation of third wave it appears that we have completed the third wave of the third during last week and we are in formation of 4th of the third and after which fifth of the third wave would be start which has all chances of moving below the low of the third wave which happens to be below 4700 which itself is nearly 350 points from current levels. The completion of the fifth wave of the third would result in completion of the third of the fifth wave and after which the market would turn up very vigorously towards atleast 5200 levels and from there the fifth of fifty would start and as per the expanding triangle the fifty wave should be more devastating of the all waves so that would happen or not we have to wait and watch. So Elliott is telling that its still not time for long time investment in stocks. So just stay in cash.

M.Sri Mahidar
Trend is Friend.
Sunday, September 4th 19.12 IST

Weekly technical Analysis for week ended 27th August 2011.
Ho Ho Ho how many times Elliott wave tells where the market is headed in case of uncertainties. This time also it was indicating from last five to six months that we are in for a bad market and you can see now where you are headed. I have been indicating from last so many months that we are in for a very very bad market as the pattern formation as per the Elliott wave was painting a bearish picture. I was giving a minimum target of around 4700 levels from last five to six months and you see what we have achieved we are virtually near the target. Mind you it is the minimum target and the maximums would be more bearish. All along the last six months many of you might be thinking that i am a bear and that why I am giving those bearish targets. But ultimately price speaks. All around the news channels or media everybody was telling that first we might not go below 5200 and then in any case it would not go below 5000 and you see the final result. That’s where the Elliott wave helps it gives a clear picture when there choes in the market and this time also it did not disappoint me or anybody. Then why I have stuck to the pattern, even though sometimes market was trying to indicate otherwise, because the reversal patterns or the negation of the pattern was not indicated. As per elliotte till its proven otherwise we should stick to the original pattern, with amendments along as the price move and if the pattern changes then just change accordingly and don’t argue. And this time also it did not deceive me.
The movement of nifty during the week is indicating an extremely weakness for the market. This week market has done one of the very bearish patterns. It has moved and close below 200 week EMA on weekly charts, which is a very bearish indication. In the last two decades market has moved below 200 week EMA only three times earlier and this time its fourth time it has done. And in the earlier three times it whenever it has moved below 200 week EMA market has fell by at least 20% from those levels and we have to see whether it would be different this time. If you go by the history then we have to fall by 20% from these levels. Means nearly 1000 points from these levels it frightening if you consider at this point of time but target might be achieved. One positive point for short time, except in 2008, in earlier two occasion nifty has immediately bounced back and then it has collapsed. Whether this would happen this time also. In the coming week, we have to see market recovering and closing above the 200 week EMA otherwise the next month would be disastrous for the market and it has all chances of collapsing from current levels. So at-least this time hope for the best.

Positive for the market:
RSI is in oversold position.

Negatives
• Nifty is trading below 15 day, 50 day, 100 day and 200 Day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• Nifty has moved below 200 week EMA.
• Daily and weekly MACD is in sell mode,
• Daily and weekly stochastic is in sell mode.
• Monthly MACD is in sell mode indicating weakness in the market.

Elliotte Wave analysis:

In previous weeks I have indicated that we might be forming an expanding triangle and it appears that we might have completed fourth wave and it appears that we have started the fifth wave and it appears as per the current wave structure and we might have completed the 1st wave of the fifth wave and it appears that we might have completed 2nd wave of the 5th wave and it seems that we might has started the 3rd wave of the 5th wave and generally the 3rd wave would be most violent and devastating and the longest, which is being indicated by gap down opening. The first wave of the 5th wave was around 750 points and the second wave was nearly 61.8% of the first wave and wave would normally be at-least 161.8% of the first wave so we have chances of correcting around 1250 points from the end of the second wave of the 5th wave which happens to be around 5700 levels giving us a target of 4500(o no) we might doubt this target but if the pattern is correct then we have all chance of correcting. So now we are near the target so Elliott wave has again played its part.
Generally in Expanding triangle pattern the fifth wave goes near or below the trend line and the low the trend line is more frightening for bulls around 3800 levels really scary. Nearly 80-90% of the time it happens. So till it is proved otherwise we can expect these levels. The latest wave count is give below 
The updated wave structure is given in the chart below. There are three options, so I have given the three wave counts in different colors. I would explain it in detail in the coming week. The breakup of waves is indicating the we are in for very bad days in coming weeks or months. So brace for it.

M.Sri Mahidar
Trend is Friend.
Sunday, August 28th 19.53 IST

nifty weekly update

Weekly technical Analysis for week ended 14th August 2011.

WISH YOU ALL A HAPPY INDEPENDENCE DAY

Nifty opened this week with a gap down and also the following day with a gap and there after recovered in next two days to be sold off on Friday. During the week market formed a star as per candle and stick parlace. The pattern indicates a fierce battled between bulls and bears and finally not movement either way and we have long upper tail and also lower tail which indicates that bears tried to take the market down but bulls made sure that market does not stay at the lower levels and take the market up and bears makes sure that market does not stay at higher levels push the market down result no direction for the market. Now the coming weeks would tell which way the market would be taken. As this pattern has formed while falling it clearly indicates that it’s a pause in a fall and after some time market has all chances of eventually moving down but wait for market to confirm. One of the negative features of the last week is that bears were successful in making market closing below 5200 which is a bearish signal. Over a period of last six months market has been finding support at 5200 and this week market has successfully broken below it and during the entire week it failed to move above it which is a very weak sign. On the noticing features of market during the week is that market even though opened below 5000 on Tuesday but immediately recovered and closed above and was able to maintain above it indicates that bulls have successfully defended psychological level of 5000 and any breach of the same this week or coming weeks would take the market further below. Now we have to wait for the market to close below 5000 first on daily basis and second on weekly basis to indicate further weakness.
Positive for the market:
Market has defended 5000 level.
Negatives
· Nifty is trading below 15 day, 50 day, 100 day and 200 Day EMA.
· 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
· Daily and weekly MACD is in sell mode,
· Daily and weekly stochastic is in sell mode.
· Monthly MACD is in sell mode indicating weakness in the market.

This week I would be explaining the market as per point and figure charting. This I have explained long back and now I would be furnishing P&F as there happened an important event as per this and it’s a very bearish pattern. That is the reason for me to present here the P&F charts. Point and figure shows only demand and supply and it does not take into any oscillators so it is the best indicator of trend reversal. When supply increases it reverses from bull to bear market and when demand increases it indicates reversal for market from bear to bull market.
The point and figure chart is given below, the chart is of weekly basis.

The one indicated by big blue circle is a pattern know as triple bottom break down formation. This is a the power trend reversal indication. And also see that nifty has broken the trend line (blue line of last three years in June 2011 and failed to move above it in July and august. It may be noted that in point and figure charting trend line is drawn at an angle of 45 degrees from the low of the market in a raising market and not joining all the bottoms so the break of trend line in P&F is the most powerful reversal indication rather than in traditional method where trend line is drawn joining previous lows. You can see in the above chart that from 2008 onwards the trend line was not broken or even touched but in June 2011 is successfully broken the same. but if you have see in the traditional method it has broken number of times. So the break of the trend line followed by triple bottom break down formation is a power full reversal indication and it clearly indicates that selling pressure has taken over the market and surely further down sides are not ruled out. one of the noticing feature of P&F figure patterns is that it also gives the probable target for the break down and in the present case the target is 1500 points from 5700 levels so the target comes to around 4200 levels. it seems to be distant now but if the red trend line in the chart is not take out successfully in coming months then we have all the possible chances of achieving the target.
You can also see the small blue circle which is drawn at the 2009 bottom at the right hand bottom of the chart . Notice nifty has formed similar pattern and triple top break out formation has happened in march 2009 and you know what has happened to the market after that. I have given this to give you an idea about how powerful the pattern is. This time triple bottom break down has happened and till reversal of the same happens the selling pressure happened and till buying pressure emerges and market moves above 5700-5800 levels.
Elliotte Wave analysis:
In previous weeks I have indicated that we might be forming an expanding triangle and it appears that we might have completed fourth wave and it appears that we have started the fifth wave and it appears as per the current wave structure and we might have completed the 1st wave of the fifth wave and it appears that we might have completed 2nd wave of the 5th wave and it seems that we might has started the 3rd wave of the 5th wave and generally the 3rd wave would be most violent and devastating and the longest, which is being indicated by gap down opening. The first wave of the 5th wave was around 750 points and the second wave was nearly 61.8% of the first wave and wave would normally be at-least 161.8% of the first wave so we have chances of correcting around 1250 points from the end of the second wave of the 5th wave which happens to be around 5700 levels giving us a target of 4500(o no) we might doubt this target but if the pattern is correct then we have all chance of correcting. The this pattern is pointing towards a very weak picture. So we have to wait till the pattern is negated till then we can hope the targets to be achieved.
Generally in Expanding triangle pattern the fifth wave goes near or below the trend line and the low the trend line is more frightening for bulls around 3800 levels really scary. Nearly 80-90% of the time it happens. So till it is proved otherwise we can expect these levels. or till EW pattern is violated b movement above 4th wave. The latest wave count is give below J
Updated wave count is give below:

It appears that as we are in the fifth wave for the expanding triangle formation. And we are in the third wave of the fifth wave formation. It appears that we might see the fifth of the fifth wave to be extended and if that happens then the pace of fall would increase once we start the fifth wave. As per the updated wave pattern it appears that we might have completed the fourth wave of the third of the fifth wav and we might have all chances of the fifty wave of the third may move below the low of the three. So we have all chances of seeing sub-5000 levels in coming weeks. So brace for it.
M.Sri Mahidar
Trend is Friend.
Sunday, August 14th 20.26 IST