nifty weekly technical update

Weekly technical Analysis for week ended 28st January 2012.
The movement during the week has been one of the longest journey for bulls in last one and half year so we cannot just ignore the move. There are only two things possible as of now as this is the last desperate attempt of the bulls to decimate bears or start of a new bull run. Only time would tell which it is. So we have to wait for the same. So now the question comes why the market has risen so viciously in the current period. A major elliotte wave has completed at around 4600 levels and the journey is indicating that we are in for a good up move and that is unfolding. Actually I have missed the actual completion as I have seen historically that in January the trend is down and expected the down trend to continue with wave extension.So whether the trend has turned up and down trend is over. As per my analysis its not as the Wave structure as per my analysis seems to be not over. But what actually comes I have to update it if proven wrong. As my motto always is price is king. When ever I ignore the market reminds me this I am wrong. This time I have ignored it and market has just slapped me and said that I am wrong.
It may be noted that it is the first time in last one and half years that we have seen a continues rise for the market for 4 weeks in succession. So does this indicates the trend has reversed it appears to be not as per EW the wave has not yet completed. I would discuss the EW in the relevant section. One of the important things which have happened during the week is that nifty has been able to move above 200 day EMA which is a positive point for bulls. As its generally believed that bulls survive above it and bears below it. As per this theory bulls have a say. But just we have moved up 200 day EMA last time also market moved above it and there after the market fell by 15-20%. So we have still to wait for confirmation for the same. Another strong feature is that move is that nifty has just broken he sloping trend line drawn from the highs of July 2011 which is a sign of strength of bulls and now they are nearing the trend line drawn from the high of November 2010, which it failed to go past four times earlier will this happen this time also we have to wait and see. The sloping trend line is at 5250-5275 so this line is going to offer considerable resistance. We have to see how easily market goes past it and that would indicate the strength of the bulls. So now we are coming near the real testing time and territory for bulls and bears. As it’s the real test of strength for the both whoever wins the coming move would be substantial. So be prepared for it as it is going to offer good profit potential for the trader. So we are entering into an area where we can have a good profit element for the traders. Another positive thing in the current up move is that the volumes have been good indicating the good amount of buying is going into the market. Only the time would tell whether the buying is genuine or not. Another positive thing is that the on balance volume(OBV) is also moving up indicating that the buying might be genuine.
Positive for the market:
• Nifty has moved above 200 day EMA
• Market is above 200 week EMA.
• Daily MACD is in buy mode and moving up indicating the up move may continue.
• Weekly stochastic oscillator is in buy mode and is moving up indicating the up move to continue.
• Daily stochastic is in buy move but in extremely overbought zone indicating that we might see a slight reversal in coming days.
• Daily RSI is moving into over bought zone above 75 which it went only during the highs of October/November 2010 and may/june 2009.
• Weekly MACD has give a buy signal indicating that we might see up move to continue for some time. it can only be reversed abruptly only when market falls heavily.
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.
Suddenly we are seeing so many positive signals for the market which is clearly indicating that we might be entering into extremely bullish sentiment after which we might a healthy correction. It appears the sentiment is turning into extremely bullish which might be dangerous as the bears might get the bulls unawares.
I would be giving detail analysis of EW next week as I don’t have time as of today.
But one thing what a match, the Australian open men’s singles final. I have seen one of the best grand slam finals.
M. Sri Mahidar
Trend is Friend
Celebrate Life 
Sunday, January 29th 20.15 IST

Rupee

the above three charts are done when the rupee was at around 48 and the latest update is given below.

Weekly technical Analysis for week ended 21^st January 2012.

The movement of nifty during the last two weeks, have surprised by everybody and bulls have been laughing all the way to the banks. Historically January has been a good month for the bears. As I have said earlier first half was good for bulls and the second half good for bears. But this time it appears that its bulls all the way. The movement of the market is clearly indicating that bulls are showing strength as every small fall has been bought into. It may also be noted that the volumes have also increased in the current rise compared to other rises. You might have been getting an question “have we started a new bull run?” I don’t think so as technicals are not pointing towards that. But nothing can be ruled out as subsequently everything might rosy. But till not the road was smooth for the bulls and now they are approaching the very rough road where every time they have lost to bears. 5150-5300 has been a formidable resistance for the bulls to barge through. Will this time be different, only time would tell? You might be wondering why I am leaving it to time. As I always say price is king and we have to believe the price whatever might be your interpretation of the market technically. Till now market has not formed at-least a higher high to give an indication for their strength. One of the positive things about the market is that it have broken and moved above the 50 day EMA and also above the 100 day EMA this is generally indicates strength. But is now approaching the 200 day EMA which happens to be around 5150 levels, during the last one years or so when ever market has approached or broke above it, the markets fell very swiftly. So we have to see whether the 200 day EMA resistance still exists. Another thing to be noted is that the 50 day and 100 MA are moving down and still to turn up. This still indicates that we may not still be out of woods. We would see it in the oscillator section when we come there. One of the other things to be noted is that we are nearing the sloping trend line drawn from the top of November 2010 and during the last 14 months we are have been facing resistance from the trend line will this time also it would offer resistance? We have to wait and see. One thing which is worrying me is that

If we apply time periods to the markets some interesting things are coming into place which we would be now discussing. Nifty made a top on 8^th of November 2010 and from then onwards it have been consistently falling. Now we have completed 14 months and now into 15 months and if we go by the Fibonacci time periods we have to go to next Fibonacci number i.e. 21 to complete it. It indicates that we have all chances of market moving down or consolidating at-least for another 6 months. Whooooooo that’s a long period considering the correction till now. Will that happen? It seems to be so. But there is a catch here. Market made a bottom at on 20^th of December and there after started to move up. December has completed exactly 13 months and market has started to move up, did we start the up move? Only god knows, and time would tell. So have patience time would tell everything. If nifty fails to go past 5200-5300 levels then we can be sure that we might be in for correction for another 6 months the would be a long wait for bulls but after that we can see a nice decent up move in the market.

It can be seen in the above chart that nifty has been finding support at the base line and resistance at the top line. It is around 5300 level. If nifty fails to move past it then we can see it heading towards the base line which happens to be way below 4500 levels. Also see the another trend line drawn from the top of the august 2011 top where in the nifty failed to go past this trend line at-least three times earlier and now it is approaching the same line. So it seems the coming weeks or month would be testing time for bulls and also an extreme test of strength. If they come out successfully then we can see market just running away from bears hand and if dose not then bears would have a field day. One thing is sure we have a big move in either way. So be prepared for it.

M. Sri Mahidar

Trend is Friend

Celebrate Life J

Sunday, January 22^nd 16.31 IST

Nifty Weekly Update

Weekly technical Analysis for week ended 7th January 2012.
Nifty has started the 2012 slightly weak and thereafter made a spectacular recovery and moved up and for the next three days was stuck at the high levels. This is the fourth consecutive week of close below 200 Week EMA which is a very bearish signal. Unless and other wise nifty recovers and closes above 200 Week EMA decisively there should be no hope for bulls. One of the things we have to see is the when ever a big rise is coming there is not follow up buying, but in a down move there is coming follow up selling which is clearly showing the market is in a clear bear trend and the main trend is down. So we should always try to profit from the main trend rather that the waiting to go against the trend. This week also the big move up move on Tuesday was not successfully followed up by further buying. It appears that 200 week EMA is going to be formidable resistance for the current short term up move for the market. The number of weeks it trades below 200 week EMA the bulls are becoming week. 200 week EMA is at 4851 so markets upsides might be limited to these levels. if market nears 4850, it would give a good opportunity to go short on the market with stop loss at around 4900 levels. Another thing to be noted is that 15 week EMA is about to move below 200 week EMA which is further strengthening the bears. It may also be noted that 200 day EMA is also sloping down wards and move down which is also a sign of weakness for the market and further down sides are not ruled out.

The market is formatting an another bearish formation, a heads and shoulders pattern as is indicated in the chart above. Any close below 4600 would confirm the same and we can have a healthy fall from those levels. Generally for H&S pattern the length of the heard from the neck line is the target for the H&S and the length of head is around 750 points. If H&S pattern is confirmed by break of neck line we can expect the market to fall around 750 points from the break of neck line which appears to be around 4600 at present which give a target of around 3850 levels a sub-4000 levels which I am expecting form so many months whether we achieve the same we have to wait and see. If the H&S pattern is confirmed then we can expect the target to be achieved till the pattern is negated. So the question comes when the pattern implications are negated. It can be negated when the 5400 is violated and till that time the target would be in place. But still the pattern is forming and it appears that we are in the final stages of the pattern completion. So wait patiently for completion of the pattern as it has all the potential to give a huge profit potential.
Positive for the market:
• Daily MACD is in buy mode and moving up indicating the we might see slight up move.
• Weekly stochastic oscillator is in sell mode but is about to give a buy signal indicating an up-move in coming weeks.
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.
• weekly MACD is in sell mode
• daily Stochastic is in buy mode but is about to give a sell signal.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.
It can be clearly seen from the above that the indicators are give a mixed signal. Very short term signals are showing some what positive, but the medium term indicators are indicating down wards movement so we have to wait for the short term indicators to be in conformity with the medium term to make good profit. Till then be in a side ways market.

M. Sri Mahidar
Trend is Friend
Celebrate Life :)
Sunday, December 8th 19.30 IST

AIA engg

M&M

Yes Bank