Nifty Weekly Technical update

Weekly technical Analysis for week ended 30th April 2011.
Nifty during the entire week appears to be closing in red day on day except for first day of the week indicating the bears were coming into the market. The market closed at the lowest point on the week indicating the bears were successful in keeping the market down. Another important point to be noted is that nifty closed at four week low which is a bearish signal and any close below 5693 has all chances of increasing the pace of the fall. So the coming week is going to decide the fate of the market at-least for short period of time. Nifty now is just placed at the 100 day EMA, during the last one month it has once taken support at the 100 day EMA and then moved up towards 5900 whether the same would happened now or market would move further down we have the wait and see. One of the noticing features of the fall during the week is that the volumes have been continually increasing day on day and were highest on Friday indicating the some amount of selling is coming into the market. Another point to be noted is that the volumes were highest during this week and also day on day the volumes were high compared to the last one month indicating that bears are gaining strength. Even the results of major companies were not so great, which is also proving a point that the market might move downward in this month. It appears that unless and otherwise some this spectacular event happens it appears that it would be difficult for the market to move past 6000 in a hurry.
Positive for the market:
· Nifty is trading above 50 day, 100 day and 200 Day EMA.
· There is a divergence in MACD histogram.
· Weekly MACD has give a buy signal
Negatives developing:
· Daily stochastic oscillator has given sell signal and is moving down.
· 50 day EMA is still trading below 200 day EMA indicating weakness.
· Daily MACD has given a sell signal.
· Monthly MACD is in sell mode indicating weakness in the market.
Elliott wave analysis:

In previous weeks I have indicated that we might be forming an expanding triangle and we are in formation of the fourth wave and after completion of the same we can see fifth wave developing which would take the market down very swiftly and it would be very violent and also the longest of all the waves. The longest wave till now is of length 1000 points so the fifth wave would be of at-least 1000 length so we have to prepare for the same or would be Fibonacci relations and generally 138.10% or 161.8% so if the pattern is confirmed then we have some amount of trouble coming into the market.

The pattern is similar to that has been formed in January to may 2004 which is given below:
You see the fifth wave which is from around 1900 to around 1300 levels that have been the longest and the most volatile. Whether the same would happen now we have to wait and watch. Generally in an expanding triangle very body gets bullish on completion of the fourth wave and then the market suddenly turns the same seems to be happening now and the same was in April 2004 so we have to see whether the same happens now or not. Just wait and watch.

Wolf wave:

In my previous update, I have indicated nifty has formed a wolf wave and any close below 5700 on weekly basis would confirm the same, we are just near 5700 so if it is confirmed during the current week then we have all chances of taking the market below 5000 as per this so be prepared for the same once the same is confirmed.
M.Sri Mahidar
Trend is Friend.
Sunday, May 1st 18.28 IST